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Tax Cuts & Jobs Act (TCJA)

REVISED 11/1/2018

Individual Provisions

  1. Change in Overall Tax Brackets and Rates
Married Filing Joint Single
2017 2018 2017 2018
Rate Bracket Rate Bracket Rate Bracket Rate Bracket
10%            Below 10%          Below 10% Below 10% Below
15% $18,650 12% $19,050 15% $9,325 12% $9,525
25% $75,900 22% $77,400 25% $37,950 22% $38,700
28% $153,100 24% $165,000 28% $91,900 24% $82,500
33% $233,350 32% $315,000 33% $191,650 32% $157,500
35% $416,700 35% $400,000 35% $416,700 35% $200,000
39.60% $470,700 37% $600,000 39.60% $418,400 37% $500,000

 

  1. Personal Exemptions suspended through 2025
  2. Standard Deduction increased to Single $12,000; MFJ $24,000
  3. Medical Expenses 10% AGI limitation beginning in 2019
  4. Phase Out of Itemized Deductions suspended through 2025
  5. Deductible State & Local income Taxes limited to $10,000 until 2025
  6. Qualified Residence Interest
    1. acquisition indebtedness limited to $750,000
    2. acquisition indebtedness incurred before 12/15/2017 limited to $1,000,000
    3. home equity indebtedness deduction suspended through 2025
    4. if (b) above applies you can refinance the debt but cannot extend the term or the amount of acquisition debt
  7. Charitable Contributions resulting in College Athletic Seating nondeductible after 2017
  8. All charitable contributions nee contemporaneous written documentation
  9. Personal Casualty and Theft Loses only allowed for Federally declared disaster
  10. Miscellaneous Itemized Deductions suspended through 2025
  11. Moving Expense Deduction suspended through 2025
  12. Alimony Deduction & Income repealed after 2018
  13. Like-Kind Exchange Limited to Real Property
  14. Child Tax Credit increased to $2,000 for children under the age of 17 with the credit beginning to phase out for Single at $200,00; MFJ at $400,00.

Tax Cuts & Jobs Act (TCJA)

Business Provisions

  1. Net Operating Losses beginning in 2018
    1. NOL limited to 80% of taxable income
    2. Repeal of 2-year carryback rule but can be carried forward indefinitely
  2. Qualified Business income aka “pass thru deduction” – see separate analysis
  3. Domestic Production Activities Deduction repealed
  4. Business and Entertainment Expenses
    1. Entertainment expenses for business purposes are non-deductible.
    2. Recreational expenses principally for the benefit of employees are 100% deductible.
    3. Expenses for food and beverages furnished on business premises of the taxpayer primarily for his employees are 50% deductible.
    4. Meals provided in conjunction with carrying on any trade or business are 50% deductible
    5. Expenses incurred by a taxpayer directly related to business meetings of his employees, stockholders, agents and directors are 50% deductible.
    6. Expenses directly related and necessary to attendance at business leagues, chamber of commerce (any organization described in IRC Section 501(c)(6)) are 50 % deductible.
  5. Qualified Leasehold Improvements redefined to include leasehold improvements made to property that is either leased or owned by the taxpayer
  6. Section 179 Expense
    1. increased to $1,000,000 for 2018
    2. reduction in limitation increased to $2,500,000
    3. qualified real property to include
      1. Qualified Leasehold improvements
      2. also
        1. Roofs
        2. Heating, ventilation and AC systems
        3. Fire protection and alarm systems
        4. Security systems
      3. Bonus depreciation effective 9/28/17
        1. on assets acquired 100%
        2. Applies to new and used as long as the property was not used by the taxpayer prior to the acquisition