How will tax reform affect you? Contact a local tax expert today!
The Tax Cuts and Jobs Act is the largest change to the tax code since 1986. This bill will be effective for the 2018 tax year and beyond. For the vast majority of taxpayers this means they will not see a change in there taxes until they file a return in early 2019. Below are a FEW key changes that will impact the majority of our clients.
Individual, Married Filing Joint, and Head of Household Filers:
- Lower tax brackets for the large majority of filers. (new brackets listed below)
- Doubling (approximately) of the standard deduction from to $12,000 for individuals and $24,000 for married filing joint, and $18,000 for head of household.
- Doubling the Child Tax Credit to $2,000 per child.
- Add the 529 savings accounts for child education savings (was a Maryland State deduction not federal deduction).
- 20% deduction on “Qualified Business Income” for most S-Corps, Partnerships and Sole Proprietors.
- Repeal of the Affordable Care Act’s individual mandate beginning 2019.
- Elimination of the interest deduction on home equity loans.
- Elimination of most itemized deductions OTHER THAN home mortgage interest, state and local taxes, property tax, charitable deductions, and medical deductions.
| Tax Rate | Income Range for Individuals | Income Range for Married Joint Filers |
| 10% | $0 – $9,525 | $0 – $19,050 |
| 12% | $9,526 – $38,700 | $19,051 – $77,400 |
| 22% | $38,701 – $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 |
| 37% | $500,001 and Up | $600,001 and Up |
Businesses: SCORPs, PARTNERSHIPS
The new tax code favors these structures with a 20% deduction on pass through income. Please call OC Tax today and see if your business could benefit by converting to a “Pass-Through” entity structure.
This is a brief description of key points that effect our clients and potential new clients, we will being updating the information in the coming weeks.
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