On December 22, 2017, the most sweeping tax legislation since the Tax Reform Act of 1986 was
signed into law. The Tax Cuts and Jobs Act of 2017 (TCJA) makes small reductions to income tax rates for most individual tax brackets and significantly reduces the income tax rate for corporations. It also provides a large new tax deduction for owners of pass-through entities and significantly increases individual alternative minimum tax (AMT) and estate tax exemptions. And it makes major changes related to the taxation of foreign income.
It’s not all good news for taxpayers, however. The TCJA also eliminates or limits many tax breaks, and much of the tax relief is only temporary.
Here is an overview of some of the key changes affecting individual and business taxpayers.
There is an update to the language on the 2018 estate tax exemption based on the IRS’s recent release of 2018 inflation adjustments.
TIME FOR PLANNING
We’ve only briefly covered some of the most significant TCJA provisions here. There are additional rules and limits that apply, and the law includes additional provisions. As with any piece of massive legislation, many questions about implementation and impact linger unanswered. We’ll keep you apprised as more information becomes clear about how the TCJA will affect individual and business taxpayers.
In the meantime, please contact us if you have questions about how the TCJA may affect you or your business. As the largest overhaul of the tax code in more than three decades, the TCJA requires proper planning to minimize any negative impact and maximize available tax benefits.