TAX CUTS AND JOBS ACT
Tax Cuts and Jobs Act. It changed an awful lot of the Internal Revenue Code. Getting familiar with the changes will take some time, but knowing many of the changes, especially is you are doing your own taxes, is essential, to do them right. Here are some of the highlights it. Tax Cuts and Jobs Act.
Individual tax provisions that were eliminated. The personal exemption deductions are suspended and the phase out of itemized deductions base on adjusted gross income is suspended. The itemized deduction for home equity interest is no longer allowed. Itemized deductions for miscellaneous itemized deductions subject to the 2% floor are no longer allowed. Examples include investment expenses, unreimbursed employee business expenses, and tax preparation fees.
Personal casualty loss and theft deductions are eliminated unless the loss is incurred in a federally declared disaster area. Effective for 2019, the shared responsibility payment under the Affordable Care Act for not having minimum essential health insurance coverage is zero. The 2018 alternative minimum tax exemption and phase out ranges are increased. For the charitable contribution deduction, the percentage of AGI limitation for cash to public charities and certain other organizations increased from 50% to 60%. After the Tax Cuts and Jobs Act was passed, in the first tax filing season, many taxpayers were dismayed at the fact they actually owed more in tax. For those taxpayers a good Tax Resolution Specialist might be in order to explain Tax Relief option, including those in the IRS Fresh Start Program. Better than the IRS coming after you and ending up with a IRS Wage Garnishment.
The estate and gift tax exemption amount increased to $11,180,000. The long term capital gain and qualified dividend income maximum tax brackets no longer follow the tax brackets for regular income tax purposes. The parent’s rate is no longer used to calculate the kiddie tax, instead, taxable income attributable to net unearned income is taxed at the estates and trusts tax rates for both ordinary income and net capital gains.
Section 199A deduction is effective as of January 1, 2918. Sole proprietorships, partnerships, and S corporations may be eligible for some or all of the new 20% deduction of qualified business income. Hobby expenses are no longer deductible as the entire section of the Schedule A subject to the 2 % threshold has been eliminated.