1. Tax Cuts & Jobs Act of 2017 (TCJA) Overview
Date
Presenter’s name(s)

2. AGENDA
Quick Facts on TCJA Tax Bracket Comparison: 2017 & 2018 Impact on Payroll Net Pay Increase Opportunities

3. QUICK FACTS ON TCJA

4. Quick Facts on TCJA
Tax Cuts & Jobs Act of 2017 (TCJA) signed into law December 22, 2017
Largest overhaul of the tax code since 1986
Individual tax implications are temporary; set to “sunset” after 12/31/2025

5. Quick Facts on TCJA
Major business tax implications applicable to ministry staff:
Repeal of moving expense deduction
Repeal of deduction for unreimbursed employee business expenses

6. TAX BRACKET COMPARISON: 2017 & 2018

7. 2017 Tax Bracket Income Ranges (Taxable Income)
2017 Tax Brackets
Single
Head of Household (HOH)
Married Filing Jointly or Qualifying Widow(er) (MFJ)
Married Filing Separately
10%
$0–$9,325
$0–$13,350
$0–$18,650
15%
$9,326–$37,950
$13,351–$50,800
$18,651–$75,900
25%
$37,951–$91,900
$50,801–$131,200
$75,901–$153,100
$37,951–$76,550
28%
$91,901–$191,650
$131,201–$212,500
$153,101–$233,350
$76,551–$116,675
33%
$191,651–$416,700
$212,501–$416,700
$233,351–$416,700
$116,676–$208,350
35%
$416,701–$418,400
$416,701–$444,550
$416,701–$470,700
$208,351–$235,350
39.6%
$418,401+
$444,551+
$470,701+
$235,351+

8. 2018 Tax Bracket Income Ranges (Taxable Income)
2018 Tax Brackets
Single
Head of Household (HOH)
Married Filing Jointly or Qualifying Widow(er) (MFJ)
Married Filing Separately
10%
$0–$9,525
$0–$13,600
$0–$19,050
12%
$9,526–$38,700
$13,601–$51,800
$19,051–$77,400
22%
$38,701–$82,500
$51,801–$82,500
$77,401–$165,000
24%
$82,501–$157,500
$165,001–$315,000
32%
$157,501–$200,000
$315,001–$400,000
35%
$200,001–$500,000
$400,001–$600,000
$200,001–$300,000
37%
$500,001+
$600,001+
$300,001+

9. Comparison of Standard Deductions, Personal Exemptions and Child Tax Credits
$6,350 (Single)
$12,000 (Single)
$9,350 (HOH)
$18,000 (HOH)
$12,700 (MFJ)
$24,000 (MFJ)
2017 Personal Exemption
2018 Personal Exemption
$4,050
Repealed
2017 Child Tax Credit
2018 Child Tax Credit
$1,000 max
$2,000 max

10. Saver’s Credit Currently: Going forward:
Allows taxpayers to reduce tax bill by saving for retirement
Widely underutilized by qualified employees
Not eliminated by TCJA
Going forward:
Increases income limits for 2018
Seems status as a “non-refundable credit” will continue
May not apply if taxpayer’s increased standard deduction affects the contingency of the credit
The saver’s credit ( you reduce your tax bill by saving for retirement. But strangely enough, only 12% of qualifying employees are taking advantage of the credit, even though low- and moderate-income savers might qualify for a tax credit of up to $1,000 for their first $2,000 in retirement savings.
In 2018, the income limits on the saver’s tax credit will increase — all the more reason workers should be taking advantage. For joint filers, the income limit will inch up to $63,000, a $1,000 increase from For the head of household filers, the limit will be $47,250, a $750 increase. And for single or married filers filing separately, the limit increases to $31,500, a $500 raise.
Because the saver’s tax credit is nonrefundable and the standard deduction is doubling (larger reduction to taxable income), there will be reduced income tax calculated and therefore less of a chance for the credit.  The larger standard deduction may affect the savers credit application.

11. IMPACT ON PAYROLL

12. Impact on Payroll Federal Tax Withholding
EXAMPLE 1
Marital status
Head of household (single)
Allowances 2
Pay period frequency
Bi-weekly (26 pay periods)
Taxable salary
$43,000
($45,000 salary less $2,000 Sec. 125 pretax benefits)
Tax withheld under prior tax regulation
$170 per pay period
Tax withheld under new TCJA
$136 per pay period
$34 increase per pay period

13. Impact on Payroll Federal Tax Withholding
EXAMPLE 2
Marital status
Head of household (single)
Allowances 2
Pay period frequency
Bi-weekly (26 pay periods)
Taxable salary
$63,000
($65,000 salary less $2,000 Sec. 125 pretax benefits)
Tax withheld under prior tax regulation
$342 per pay period
Tax withheld under new TCJA
$275 per pay period
$67 increase per pay period

14. Impact on Payroll Federal Tax Withholding
EXAMPLE 3
Marital status
Married
Allowances 2
Pay period frequency
Bi-weekly (26 pay periods)
Taxable salary
$93,000
($95,000 salary less $2,000 Sec. 125 pretax benefits)
Tax withheld under prior tax regulation
$405 per pay period
Tax withheld under new TCJA
$323 per pay period
$82 increase per pay period

15. Impact on Payroll Federal Tax Withholding
EXAMPLE 4
Marital status
Married
Allowances 2
Pay period frequency
Bi-weekly (26 pay periods)
Taxable salary
$113,000
($115,000 salary less $2,000 Sec. 125 pretax benefits)
Tax withheld under prior tax regulation
$598 per pay period
Tax withheld under new TCJA
$476 per pay period
$122 increase per pay period

16. NET PAY INCREASE OPPORTUNITIES

17. Net Pay Increase Opportunities
Pay down credit card debt
Start or grow emergency fund
Designate increase toward your retirement savings goal of 15%

18. QUESTIONS?

19. CONTACT US 1-888-98-GUIDE (1-888-984-8433) Info@GuideStone.org
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