2018 Tax law Changes

Individuals Individual tax rates have been reduced approximately 2%

Individuals Individual tax rates have been reduced approximately 2% 7 Tax brackets retained

Individuals Individual tax rates have been reduced approximately 2% 7 Tax brackets retained Personal exemptions are gone ($4,050 per person)

Individuals Individual tax rates have been reduced approximately 2% 7 Tax brackets retained Personal exemptions are gone ($4,050 per person) Child and family tax credit increased from $1,000 to $2,000 (children under 16)

Individuals Individual tax rates have been reduced approximately 2% 7 Tax brackets retained Personal exemptions are gone ($4,050 per person) Child and family tax credit increased from $1,000 to $2,000 (children under 16) Alternative Minimum Tax still in effect but has been defanged a little

Individuals Individual tax rates have been reduced approximately 2% 7 Tax brackets retained Personal exemptions are gone ($4,050 per person) Child and family tax credit increased from $1,000 to $2,000 (children under 16) Alternative Minimum Tax still here but has been defanged a little State and local tax deduction – limited to $10,000

Individuals Individual tax rates have been reduced approximately 2% 7 Tax brackets retained Personal exemptions are gone ($4,050 per person) Child and family tax credit increased from $1,000 to $2,000 (children under 16) Alternative Minimum Tax still here but has been defanged a little State and local tax deduction – limited to $10,000 Capital gains tax rates unchanged

Individuals Standard deduction has been doubled ($24,000 MFJ, $12,000 Single & MFS - $18,000 HOH)

Individuals Standard deduction has been doubled ($24,000 MFJ, $12,000 Single & MFS - $18,000 HOH) Itemized deductions subject to 2% floor eliminated (unreimbursed employee expenses, investment expenses, tax preparation fees, union dues, educator expenses, etc.)

Individuals Standard deduction has been doubled ($24,000 MFJ, $12,000 Single & MFS - $18,000 HOH) Itemized deductions subject to 2% floor eliminated (unreimbursed employee expenses, investment expenses, tax preparation fees, union dues, educator expenses, etc.) Home equity loan interest deduction repealed

Individuals Standard deduction has been doubled ($24,000 MFJ, $12,000 Single & MFS - $18,000 HOH) Itemized deductions subject to 2% floor eliminated (unreimbursed employee expenses, investment expenses, tax preparation fees, union dues, educator expenses, etc.) Home equity loan interest deduction repealed Alimony paid deduction repealed (agreements executed after 12-31-18)

Individuals Standard deduction has been doubled ($24,000 MFJ, $12,000 Single & MFS - $18,000 HOH) Itemized deductions subject to 2% floor eliminated (unreimbursed employee expenses, investment expenses, tax preparation fees, union dues, educator expenses, etc.) Home equity loan interest deduction repealed Alimony paid deduction repealed (agreements executed after 12-31-18) Moving expenses repealed

individuals Changes made to the Roth IRA conversion rules

Business taxation C Corporations taxed at flat rate of 21% - was top rate of 35%

Business taxation C Corporations taxed at flat rate of 21% - was top rate of 35% Businesses other than C corporations: New 20% deduction of net business income

Business taxation C Corporations taxed at flat rate of 21% - was top rate of 35% Businesses other than C corporations: New 20% deduction of net business income Applies to sole proprietors, partnerships and S corporation, trusts and estates (passthrough entities)

Business taxation C Corporations taxed at flat rate of 21% - was top rate of 35% Businesses other than C corporations: New 20% deduction of net business income Applies to sole proprietors, partnerships and S corporation, trusts and estates (passthrough entities) Business income over $415,000 (MFJ) has special rules

Business taxation C Corporations taxed at flat rate of 21% - was top rate of 35% Businesses other than C corporations: New 20% deduction of net business income Applies to sole proprietors, partnerships and S corporation, trusts and estates (passthrough entities) Business income over $415,000 (MFJ) has special rules Service business over $315,000 (MFJ) no deduction

Business taxation C Corporations taxed at flat rate of 21% - was top rate of 35% Businesses other than C corporations: New 20% deduction of net business income Applies to sole proprietors, partnerships and S corporation, trusts and estates (passthrough entities) Business income over $415,000 (MFJ) has special rules Service business over $315,000 (MFJ) no deduction Many special rules

Business taxation Bonus depreciation 100% 9-27-17 to 2022

Business taxation Bonus depreciation 100% 9-27-17 to 2022 Now includes used property

Business taxation Bonus depreciation 100% 9-27-17 to 2022 Now includes used property Equipment expensing election (Sec. 179) $1,000,000

Business taxation Bonus depreciation 100% 9-27-17 to 2022 Now includes used property Equipment expensing election (Sec. 179) $1,000,000 Must elect out of bonus depreciation to use Sec. 179

Business taxation Bonus depreciation 100% 9-27-17 to 2022 Now includes used property Equipment expensing election (Sec. 179) $1,000,000 Must elect out of bonus depreciation to use Sec. 179 Caution! Can be to much of good thing

Business taxation Bonus depreciation 100% 9-27-17 to 2022 Now includes used property Equipment expensing election (Sec. 179) $1,000,000 Must elect out of bonus depreciation to use Sec. 179 Caution! Can be to much of good thing Eligible categories have been expanded

Other changes Like-kind Exchanges Real property only

Other changes Like-kind Exchanges Real property only If exchange includes land with equipment i.e. irrigation system, equipment does not qualify

Other changes Like-kind Exchanges Real property only If exchange includes land with equipment i.e. irrigation system, equipment does not qualify Trade in of equipment is a sale!

Other changes Like-kind Exchanges Real property only If exchange includes land with equipment i.e. irrigation system, equipment does not qualify Trade in of equipment is a sale! Shouldn’t be an issue with increased limits on expensing

Other changes Like-kind Exchanges Real property only If exchange includes land with equipment i.e. irrigation system, equipment does not qualify Trade in of equipment is a sale! Shouldn’t be an issue with increased limits on expensing Net Operating Loss rules have changed No carryback (except for farmers)

Other changes Like-kind Exchanges Real property only If exchange includes land with equipment i.e. irrigation system, equipment does not qualify Trade in of equipment is a sale! Shouldn’t be an issue with increased limits on expensing Net Operating Loss rules have changed No carryback (except for farmers) Carry forward indefinitely limited to 80% of income

Other changes Losses limited to $500,000 excess carried forward

Tax planning Look at bunching itemized deductions like medical expenses to get added savings

Tax planning Look at bunching itemized deductions like medical expenses to get added savings Same for State and Local taxes

Tax planning Look at bunching itemized deductions like medical expenses to get added savings Same for State and Local taxes Use Health Savings Accounts to get better deduction

Tax planning Look at bunching itemized deductions like medical expenses to get added savings Same for State and Local taxes Use Health Savings Accounts to get better deduction Meet with your tax professional often to make sure you are prepared for the changes

Work opportunity tax credits When ever you hire a new employee check to see if they qualify for this credit! Veterans Unemployed for more than 6 months