Taxes Current Developments

To contact us:

Owen Fallon, CPA

Sue Fallon, Office Manager

Phone: 505-883-1099

Fax: 505-883-6737

Email: ogfcpa@qwestoffice.net

To contact us:

Owen Fallon, CPA

Sue Fallon, Office Manager

Phone: 505-883-1099

Fax: 505-883-6737

Email: ogfcpa@qwestoffice.net

 

Tax Cut and Jobs Act

In December 2017, the Republican Congress and President passed the above tax act with the biggest tax changes since the 1986 Tax Act. The following are highlights of changes that were generally effective January 1, 2018 (for 2018 & later years):

 

1) Lower individual income tax rates.

2) Doubled standard deduction with both personal exemptions and miscellaneous itemized deductions eliminated while both mortgage interest and property tax deductions capped.

3) Doubled the child tax credit and added a new $500 tax credit for other dependents.

4) Weakened the alternative minimum tax and the estate tax on high income taxpayers.

5) Cut some above-the-line deductions but expanded uses of section 529 education savings accounts.

6) Eliminated individuals’ Obama-care penalty for no health coverage as of January 1, 2019.

7)  Expanded both the amount and availability of first year expensing for business assets and shortened the depreciable lives of real and rental properties for quicker write-off.

 

8) Lowered C corporate income tax rates by nearly half and adds a limited 20% deduction of net income for partnerships, Sub S corps and sole proprietorships.

 

The above list is not extensive and the various provisions were first effective for the 2018 calendar filing year.  The stated, “post card filing” simplification goal has not be a reality for anything other than very simple tax returns and returns for business and rental property owners have increased in complexity.  At least some decrease in federal income taxes has occurred for most taxpayers under the new Act.