1. Connie Tritt, CPA Richmond Rotary Club 12/14/2018
TCJA Tax Law Update
Connie Tritt, CPA
Richmond Rotary Club
12/14/2018

2. Tax Rates are lower!!! New tax brackets (MFJ) Old Tax Brackets (MFJ)
10% 0-$19, % 0-$19,050
12% $19,051-$77, % $19,051-$77,400
22% $77,401-$165, % $77,401-$156,150
24% $165,001-$ 315, % $156,151-$237,950
32% $315,001-$400, % $237,951-$424,950
35% $400,001-$600, % $424,951-$480,050
37% $600,001 and over % $480,051 and over

3. Standard Deduction is Bigger!
Filing Type New Std. Deduction Old Std. Deduction
Joint $ 24, $ 13,000
Head of Household $ 18, $ 9,550
Single (and MFS) $ 12, $ 6,350
Additional for 65 and over $ 1,300 – married $1,600 Unmarried
No More Personal Exemptions

4. Child Tax Credit and Family Tax Credits
Increased Child Tax Credit from $1,000 to $2,000 per child (<17 years old)
Non-refundable credit of $500 for other dependents (>17 years old)
No credit if income is >$400,000 (MFJ)

5. Alimony
Alimony is no longer deductible (nor included in recipient’s income) for agreements in place after December 31, 2018.
But, Alimony paid pursuant to a divorce agreement in place before December 31, 2018 is grandfathered. (still deductible and still income to the recipient)

6. Itemized Deductions
Bigger Standard Deduction will be better than itemized deductions in some cases.
Changes:
Limited deduction for state and property taxes = $10,000
Limited deduction for Mortgage interest if debt is > $750k
No more deduction for Home Equity Line of Credit except for acquisition or improvement of primary residence (except as grandfathered in before 12/31/17)
No more deduction for Miscellaneous Itemized Deductions (2% floor)
Unreimbursed employee business expenses
Home office for employees
Union dues, and out of pocket expenses for uniforms, etc.
Investment advisor fees or asset management fees

7. Alternative Minimum Tax
AMT still exists, but it is harder to get into it.
Higher exemption amounts
Higher phaseout ranges for exemption amounts
Filing Status New Law Old Law
Single, HOH $500, $123,100
MFJ $1,000, $164,100
MFS $ 500, $ 82,050

8. Section 199A Small Business Deduction
Small businesses can take 20% tax deduction (“Pass- through”) deduction
Except some service businesses cannot get the credit (unless they are very small)
Health, law, accounting, performing arts, consulting, financial services, brokerage services
Some businesses are limited to 20% of wages paid

9. Questions???