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

 

2. Personal Exemptions suspended through 2025
3. Standard Deduction increased to Single $12,000; MFJ $24,000
4. Medical Expenses 10% AGI limitation beginning in 2019
5. Phase Out of Itemized Deductions suspended through 2025
6. Deductible State & Local income Taxes limited to $10,000 until 2025
7. 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
8. Charitable Contributions resulting in College Athletic Seating nondeductible after 2017
9. All charitable contributions nee contemporaneous written documentation
10. Personal Casualty and Theft Loses only allowed for Federally declared disaster
11. Miscellaneous Itemized Deductions suspended through 2025
12. Moving Expense Deduction suspended through 2025
13. Alimony Deduction & Income repealed after 2018
14. Like-Kind Exchange Limited to Real Property
15. 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 Domestic Production Activities Deduction repealed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