Highlights of the 2018 Tax Bill
Below, I have written a high level summary of the effect of the tax bill and included a link to my reference.
Personal Income Taxes
- Lowered graduated tax rates beginning in 2018;
- Doubled the standard deduction (expires after 2025);
- Eliminated personal exemptions;
- Retained deductions for charitable contributions, retirement savings, and student loan interest;
- Limited deduction on mortgage interest;
- Limited the deduction on state and local taxes to $10,000;
- Expanded the deduction for medical expenses for 2017 and 2018;
- Repealed the Obamacare mandate (starting in 2019);
- Increased the child tax credit;
- Eliminated most itemized deductions;
- Created a credit for non-child dependents; and
- Increased the exemption for the AMT.
Estate Taxes
- Doubled the estate tax exemption.
Business Taxes
- Lowered the maximum corporate tax rate;
- Raised the standard deduction to 20% for pass-through businesses (expires after 2025);
- Limited corporations' ability to deduct interest expense to 30% of income;
- Allows businesses to deduct the cost of depreciable assets in year one;
- Stiffened the requirements on carried interest profits;
- Eliminated the corporate AMT;
- Allowed companies to repatriate income by paying a one-time tax rate of 15.5% on cash and 8% on equipment;
- Allowed oil drilling in the Arctic National Wildlife Refuge;
- Retained tax credits for electric vehicles and wind farms;
- Cut the deduction for orphan drug research from 50% to 25%; and
- Cut taxes on beer, wine and liquor.
In summary, the tax bill is very favorable to businesses while providing moderate relief to individual taxpayers.
https://www.thebalance.com/trump-s-tax-plan-how-it-affects-you-4113968
Disclaimer
Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.
Having a concise list like this makes understanding the bill much easier. Much appreciated!
No problem.