Not since Ronald Regan championed the Tax Reform Act of 1986 has there been so many tax changes. Even the tax forms have changed! The IRS has attempted to shorten and simplify filing which has added many new tax schedules and complicated the process. There are many tax benefits and tax increases contained in the tax law change.
“The Trump Tax Act of 2018” has lowered tax rates for businesses and individuals, eliminated exemptions, increased standard deductions, limited State and Local Taxes “SALT” to $10,000, all but eliminated employee business deductions and the alternative minimum tax. The tax bill caps mortgage interest deductions while eliminating the penalty for not having health insurance after 12/31/18. For families, there has been a big relief as prior to the act, eligible families were given $1,000 credit per child for children 17 or under; however, many working families were phased out beginning at $110,000 of income but now the credit was increased to $2,000 for eligible families with income below $400,000. There are also major positive changes for estate taxation such as raising the estate exclusion amount to $11.18 million from $5.49 million.
The tax act created a new and huge opportunity for tax relief for stock and real estate investors called opportunity zones which has created a whole new industry devoted to economic growth.
Please refer to the “Trump Tax Act” (PDF) to view a comprehensive list of the changes.
As always, our firm provides personalized guidance while carefully preparing your taxes. As part of the process, we compare your 2018 taxes to 2017 taxes and explain any changes and strategize with you tax planning opportunities. We look forward to assisting you with your tax matters.