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 are generally effective January 1, 2018 (not for 2017):

 

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) Doubles the child tax credit and adds a new $500 tax credit for other dependents.

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

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

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

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

 

8) Lowers 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 will not effect income taxes until the 2018 calendar filing year (to file in 2019).  The stated, “post card filing” simplification goal will not be a reality for anything other than very simple tax returns and returns for business and rental property owners will increase in complexity.  However, it is likely that at least some decrease in federal income taxes will occur for most taxpayers under the new Act.