At Hylen CPA, Inc., we are fully trained on the Tax Cut Jobs Act (TCJA) of 2018. This update is the most sweeping tax reform our country has seen since 1986 and will affect all businesses and individuals at the federal level.
We’ve created a list of need-to-know information for individuals and businesses below:
Individuals
- New, reduced tax brackets
- The elimination of Exemptions on Form 1040
- Higher income thresholds are required to file a tax return
- Larger standard deductions for single, married and head of household filers
- New Section 199A deduction of 20% of all qualified business income (if self-employed)
- Increased tax bracket range for the 15% Capital Gains Tax
- Increased exemption amounts for Alternative Minimum Tax (AMT)
- A new cap on state and local taxes. Only $10,000 of state taxes and property taxes (combined) may now be deducted
- Children must now file their own tax returns and cannot put “Kiddie Tax” on their parents’ return
- The Estate Tax exclusion is increased from $5M to $10M
- Lowered caps on mortgage interest on home acquisition debt
- Home Equity Loan interest is no longer deductible
- Increases in AGI limitations for Charitable Contributions
- Casualty losses no longer deductible (unless you live in a federally declared disaster area)
- Employee business expenses are no longer allowed for W2 employees
- Safe Deposit Box fees are no longer deductible
- Legal fees are no longer deductible
- Hobby Loss Expenses are no longer deductible
- Many other changes as well…
Businesses
- Tax rate permanently dropped from 35% to 21%
- Changes in Bonus Depreciation, Section 179 Depreciation and the useful lives of certain assets
- Elimination of Business Entertainment as a deduction. Business meals still 50% deductible.
- Reform of Small Business Accounting
- Changes in Net Operating Loss rules
- 1031 Exchange changes
- Disallowance of business interest
- And much more…
If you have any questions about TCJA and how it will affect your individual or business tax filing during tax season, please reach out at (781) 436-5810 or http://hylencpa.com/contact-us/!
