For starters, the new tax law changes marginal rates and income brackets. One of the most significant aspects of the Tax Cuts and Jobs Act is the change in the federal income tax brackets. While the number of brackets remains the same at seven, the top rate now tops out at 37% instead of 39.6% … Continued
Millions of Americans will be impacted by the expansion of the standard deduction and repeal of their personal exemption. With the passage of the Tax Cuts and Jobs Act, the standard deduction for single filers increases to $12,000 and to $24,000 for married couples filing jointly. Anyone age 65 and older in 2018 will continue … Continued
In a move that eases the pain of the repeal of the personal exemption, the child credit has doubled and is available to more families. If you are a parent of children under the age of 17, the expansion of the child tax credit from $1,000 to $2,000 per child could provide valuable tax savings, … Continued
Be sure to check your paycheck withholding. The new rules may bring some unwelcomed surprises if you’re not aware and planning accordingly. As a good practice, in general, employees should review the new tax withholding form and withholding calculator from the IRS to avoid unexpected surprises. Given the broad scope of the tax changes and … Continued
The new law makes few changes to investment income taxes, preserving the favorable rates for capital gains and dividends. With the implementation of the tax code overhaul by Congress, favorable rates for qualified dividends and long-term capital gains (net profits on investments held longer than one year) remain unchanged. Taxable income for: Single filers … Continued
Individuals will no longer be penalized for not having health insurance. Going away with this tax legislation is the individual mandate to have health insurance. This mandate, originally a centerpiece of the 2010 Affordable Care Act, required individuals to have health coverage that met new federal standards or pay a penalty. The law made exceptions … Continued
That pesky AMT survives the new tax legislation but will impact far fewer tax payers. Alternative minimum tax (AMT), the tax application to limit tax breaks, was on the chopping block but ultimately survived. Complex and unpredictable, the AMT ceiling was substantially raised. The good news for most current AMT payers is that they may … Continued
This tax has been reduced or eliminated for many married couples. The confusing and complicated tax code of the IRS as it relates to married taxpayers filing jointly seems to be saying, “Don’t get married – it’ll cost you.” A marriage penalty or bonus is the change in a couple’s total tax bill occurring as … Continued
Phew! Nothing is changing, despite an initial effort to reduce the benefit. Good news for homeowners! The effort to reduce the home seller’s exemption was unsuccessful so the current limits remain unchanged. This means that married couples filing jointly can continue to exclude $500,000 of profit on the sale of their primary residence. Single filers … Continued
One of the biggest changes occurred here, with the taxable estate exemption doubled. The number of estates predicted to owe tax in 2018 versus 2017 may be cut in half thanks to the change in the estate and gift tax exemption amount. The new limit, which applies to gifts made during life or assets left … Continued