2018 Nichols, Cauley Tax Law Changes Update and

Transcript:2018 Nichols, Cauley Tax Law Changes Update and:
2018 Nichols, Cauley Tax Law Changes Update and Planning Opportunity Presented by: William Sammons, CPA, CIA, CFP Dave Musser, CPA, CIA, CFP Keith Daniel, CPA Tax Cuts and Jobs Act Overview Changes Affecting Individuals Changes Affecting C - Corporations Changes Affecting S-Corps and Other Pass-Thru Entities Planning Opportunities Individuals Corporations S-Corps and Other Pass-Thru Entities TOPICS 2017 TAX CUTS AND JOBS ACT Effective for tax years beginning after 2017 for most provisions On an individual basis please note the changes are normally temporary effective for tax years 2018-2025 Widespread changes to individuals and businesses Pay attention to sunset dates for some provisions You win the game by singles, base on balls and walks. Tax Cuts and Jobs Act Tax Cuts and Jobs Act- Individuals Changes to income tax brackets Top individual rate now 37% down from 39.6% No change in capital gain/qualified rates Higher standard deductions MFJ- $24,000, Single- $12,000, HOH- $18,000 Removes personal exemptions Increased Child Tax Credit up to $2,000 up from $1,000 2% Misc. itemized deductions are no more Above the line deduction for teacher expenses preserved Tax Cuts and Jobs Act- Individuals Kiddie Tax Children no longer taxed at their parent’s tax rates Earned income taxed under Single tax bracket Unearned income taxed at estate and trusts rates Those who are assessed Kiddie tax has not changed Under 18 at year end 19 or over and full time student under age 24 Tax Cuts and Jobs Act- Individuals Child Tax Credit Now must have valid SSN not just ITIN Amount has increased from $1,000 to $2,000 Refundable portion increased to $1,400 from $1,000 Same definitions for who qualifies as children Additional non refundable credit for non qualifying child dependents of $500 Qualifying children without SSN but that have ITIN can qualify for $500 credit Phase out starts at 200K for single filers and 400K for MFJ Tax Cuts and Jobs Act- Individuals Changes to 529 Plans Now may distribute up to $10,000 for K-12 expenses Can roll contents into ABLE account tax free Assuming beneficiaries of 529 plan is same as ABLE account Tax Cuts and Jobs Act- Individuals Home Mortgage Interest New limit of $750,000 limit on principle balance for loans entered into after December 15th, 2017. Loan entered into before December 15th still have $1.1 million limit Still can include HELOC in calculation if used to substantially improve residence No other HELOC interest is