2018-2019 Tax Planning Guide
Welcome to the 2018 Tax Planning Guide, intended to inform you of the new developments in the world of business and individual taxation and to stimulate tax planning ideas and strategies as we enter the last quarter of 2018. Click the link below to access our online version. This year, with the passing of the Tax Cuts and Jobs Act, interest in (and close attention to) tax laws and consequences are at an all-time high. Among the significant changes are:
- New and reduced tax rates (and brackets), with most rates being two to three points lower than 2017
- Repeal of the personal exemption deduction and increase in the standard deduction to $24,000 ($12,000 for single taxpayers)
- Increase in the child credit to $2,000, with more favorable thresholds to qualify for the credit
- Flow Through Business Deduction – A new 20% deduction for qualified business income from sole proprietors, S corporations, partnerships and LLCs. The devil is in the details, and we encourage you to consult with us to optimize this potentially valuable deduction.
- SALT (State and Local Tax) deduction now limited to $10,000 – a major impact to Californians
- Mortgage Interest Deduction – The Act reduces to $750,000 the limit on the new loan amount for which a mortgage interest deduction can be claimed by individuals
- Repeal of the Individual Health Care Mandate – the ACT repeals the penalty on individuals who fail to carry health insurance
- Reduction in Corporate tax rates, with a new flat 21% rate
- Increase in annual Section 179 Expensing limitation to $2.5 million (for qualified property placed in service after 2017)
It’s never been more critical to address your tax planning strategies. While the Guide contains excellent ideas to stimulate your thinking, we encourage you to contact us to help put ideas into action and develop a plan now.