Silverman Kendall, LLC

If you itemize, you can deduct either state and local income taxes or state and local sales taxes. Deducting sales tax can be valuable if you reside in a state with no or low income tax or purchased a major item, such as a car. The deduction for state and local taxes (including income or sales tax, as well as property tax) had been on the tax reform chopping block. It survived, but, for 2018 through 2025, the Tax Cuts and Jobs Act imposes a new limit: Your total deduction for all state and local taxes combined can’t exceed $10,000. Contact us to learn more.

IRS sets limited conditions for people to prepay property taxes, stirring early confusion over GOP tax law

On December 20, Congress completed passage of the largest federal tax reform law in more than 30 years. Commonly called the Tax Cuts and Jobs Act (TCJA), the new law means substantial changes for individual taxpayers. The following is a brief overview of some of the most significant provisions. Except where noted, these changes are effective for tax years beginning after December 31, 2017, and before January 1, 2026. Drops of individual income tax rates ranging from 0 to 4... percentage points (depending on the bracket) to 10%, 12%, 22%, 24%, 32%, 35% and 37% Near doubling of the standard deduction to $24,000 (married couples filing jointly), $18,000 (heads of households), and $12,000 (singles and married couples filing separately) Elimination of personal exemptions Doubling of the child tax credit to $2,000 and other modifications intended to help more taxpayers benefit from the credit Elimination of the individual mandate under the Affordable Care Act requiring taxpayers not covered by a qualifying health plan to pay a penalty effective for months beginning after December 31, 2018, and permanent Reduction of the adjusted gross income (AGI) threshold for the medical expense deduction to 7.5% for regular and AMT purposes for 2017 and 2018 New $10,000 limit on the deduction for state and local taxes (on a combined basis for property and income taxes; $5,000 for separate filers) Reduction of the mortgage debt limit for the home mortgage interest deduction to $750,000 ($375,000 for separate filers), with certain exceptions Elimination of the deduction for interest on home equity debt Elimination of the personal casualty and theft loss deduction (with an exception for federally declared disasters) Elimination of miscellaneous itemized deductions subject to the 2% floor (such as certain investment expenses, professional fees and unreimbursed employee business expenses) Elimination of the AGI-based reduction of certain itemized deductions Elimination of the moving expense deduction (with an exception for members of the military in certain circumstances) Expansion of tax-free Section 529 plan distributions to include those used to pay qualifying elementary and secondary school expenses, up to $10,000 per student per tax year permanent AMT exemption increase, to $109,400 for joint filers, $70,300 for singles and heads of households, and $54,700 for separate filers Doubling of the gift and estate tax exemptions, to $10 million (expected to be $11.2 million for 2018 with inflation indexing) Be aware that additional rules and limits apply. Also, there are many more changes in the TCJA that will impact individuals. If you have questions or would like to discuss how you might be affected, please contact us. 2017

The recently passed tax reform bill, commonly referred to as the Tax Cuts and Jobs Act (TCJA), is the most expansive federal tax legislation since 1986. It includes a multitude of provisions that will have a major impact on businesses. Here’s a look at some of the most significant changes. They generally apply to tax years beginning after December 31, 2017, except where noted. Replacement of graduated corporate tax rates ranging from 15% to 35% with a flat corporate rate of... 21% Repeal of the 20% corporate alternative minimum tax (AMT) New 20% qualified business income deduction for owners of flow-through entities (such as partnerships, limited liability companies and S corporations) and sole proprietorships through 2025 Doubling of bonus depreciation to 100% and expansion of qualified assets to include used assets effective for assets acquired and placed in service after September 27, 2017, and before January 1, 2023 Doubling of the Section 179 expensing limit to $1 million and an increase of the expensing phaseout threshold to $2.5 million Other enhancements to depreciation-related deductions New disallowance of deductions for net interest expense in excess of 30% of the business’s adjusted taxable income (exceptions apply) New limits on net operating loss (NOL) deductions Elimination of the Section 199 deduction, also commonly referred to as the domestic production activities deduction or manufacturers’ deduction effective for tax years beginning after December 31, 2017, for noncorporate taxpayers and for tax years beginning after December 31, 2018, for C corporation taxpayers New rule limiting like-kind exchanges to real property that is not held primarily for sale New tax credit for employer-paid family and medical leave through 2019 New limitations on excessive employee compensation New limitations on deductions for employee fringe benefits, such as entertainment and, in certain circumstances, meals and transportation Keep in mind that additional rules and limits apply to what we’ve covered here, and there are other TCJA provisions that may affect your business. Contact us for more details and to discuss what your business needs to do in light of these changes. 2017

5 things to do before Jan. 1 to lower your tax bill