1. Presented By: Ryan J. Duffy
2018 Tax Cuts and Jobs Act: What Does It Mean for You and Your Business?
Presented By: Ryan J. Duffy

2. GENERAL ASPECTS Passed on December 20, 2018
Effective for 2018 Tax Year (minor exceptions for effective 2019 – ACA Mandate)
Sunsets December 31, 2025
Why?
Do we think this will happen?
Lower Individual and Corporate Tax Rates
Urgently needs IRS regulations and jurisprudence

3. What Does it Mean for Individuals?
Standard Deduction essentially doubled
$12,000 for Single, $24,000 for Married Filing Jointly
Fewer will itemize, but beware (more favorable aspects of charitable giving, medical deduction, etc.)
Simplify taxes for many, but not all
State and local income tax (SALT) limitation ($10k)

4. What Does it Mean for Individuals?
New Tax Brackets
More condensed
Maximum Rate is 37% (at $500k + vs. $418,400)
Elimination of Personal Exemption
Formerly $4,050
Child Tax Credit
$2,000 (vs. $1,000)
Credit vs. Deduction

5. What Does it Mean for Individuals?
Miscellaneous Items
Charitable Deduction Treatment
Donations for Tickets
Elimination of all 2% of income misc. deductions
Medical deductible over 7.5% AGI (vs. 10%), effective 2017
Estate and GST Taxes

6. What Does it Mean for Businesses?
General Items
Creativity will rule the day
Client Entertainment Expense eliminated
Club Dues
Tickets
Meals/Drinks
Parking still deductible?
Depreciation Increase
Interest Expense limitation of 30% (over gross receipts of $25mm)
Elimination of NOL carryback, but unlimited carryforward

7. What Does it Mean for Businesses?
Treatment of pass-through entities
Applies to:
Entity taxed under Subchapter S (can be LLC or Corp.)
Partnership
Most LLCs
In general, Taxpayer receives a 20% deduction of Qualifying Business Income (QBI) from a pass-through entity
Simple, right?!

8. What Does it Mean for Businesses?
20% of QBI Deduction
Subject to limitations
Limited to greater of:
50% of W-2 wage for such business; or
25% of W-2 wages + 2.5% of qualified property
Qualified property is tangible property subject to depreciation and available for use (and used) in your business at the end of the tax year

9. What Does it Mean for Businesses?
20% of QBI Deduction
$315,000 for MFJ or $157,500 for Single are exempt from 20% limitation
Specified Service Trade or Business
Doctors, lawyers, dentists, accountants
Architects and Engineers – Still allowed
$315k still applies

10. What Does it Mean for Businesses?
C Corporations
Same entertainment, etc. deduction limitations apply
Same favorable depreciation rules
What’s new?

11. What Does it Mean for Businesses?
C Corporations
Flat tax rate of 21%
Former rate was 35%
Why important?
Will Corporations ACTUALLY pay less?
Elimination of credits
Elimination of deductions

12. Miscellaneous Repatriation Estate and Gift Tax Foreign Income
How to Proceed?

13. Miscellaneous
Questions?
Thank you!