2018 Tax Bill Highlights

Here we go, folks...

 

The House passed it in Dec 2017 227 to 203 and the Senate was 51 to 48. It takes effect now - Jan 2018 and tax withholding will reduce starting in Feb 2018.

 

So please note that these numbers do not affect what happened with your money in 2017 - it starts in 2018.

The brackets shifted slightly and the standard deduction has doubled

For individuals:

10%: Up to $9,525
12%: $9,526 – $38 ,700
22%: $38,701 – $82,500
24%: $82,501 – $157,50 0
32%: $157,501 – $200,000
35%: $200,001 – $500,000
37%: More than $500,000

The standard deduction for individuals will now be $12,000

 

For married, filing jointly:


10%: Up to $19,050
12%: $19,051 – $77 ,400
22%: $77,401 – $165,00 0
24%: $165,001 – $315,000
32%: $315,001 – $400,000
35%: $400,001 – $600,000
37%: More than $600,000


The standard deduction for married, filing jointly it will be $24,000

 

For those filing as Corporations, the tax rate reduced from 35% to 31% and pass-through businesses.

This means...with required amounts and thresholds hit of over 15k in transactions first, of course, that YOU, if you are indeed Self-employed freelancers/independent contractors that file like an actual business and most small businesses may actually pay a little less tax on  your business income.


See this really good NY Times article for a few more details and examples of how it may work for you.
— https://www.nytimes.com/interactive/2017/12/20/us/politics/small-business-tax-cut-pass-throughs.html

A few more quick notes...

  •  Fewer people will pay AMT individually and corporate AMT was repealed.
  • The Child Tax Credit was increased to 2,000 with the first 1,400 being refundable phasing out at an increased amount for single parents and married parents.
  • There is a $10k cap on state and local tax deductions, though.

I hope that was a bit helpful.  If you need to know if you will be helped or hindered by this, we can do further research on your specific situation is you email the firm team at:  service@prounumsolutions.com 

Good luck and Happy New Year!

Nat