CFMA VoS Monthly Program Recap!

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                                            "2018 Changed It All"
The CFMA Luncheon topic '2018 Changed It All' was very informational.  Recent revisions have been made to the U.S. Tax Code to implement the new tax law, called the Tax Cuts and Jobs Act (TJCA).
 
It has been many years since the last changes. We will all see the effects on our 2019 tax returns as it'll include individual and corporate filers.
  • Effective for the years after December 31, 2018 through 2025, Tax Rate Reductions have changed for Individual and Corporate taxpayers in preparation for inflation.
    • Individual:
      • Tax rate decrease from 39.6% to 37%
      • Top rate bracket increased from $418,400 to $500,000
(Married filing jointly (MFJ) from $470,700 to $600,000)
  • Capital gain rates are retained at 0, 15% with a threshold of $38,600 (MFJ $77,200) & 20% with a threshold of $425,000 (MFJ $479,000) and is based on the overall taxable income
  • TCJA increases the standard deduction, while personal exemptions and all miscellaneous itemized deductions have been suspended
  • TCJA set a limit on mortgage interest deduction in the amount of $750,000 but the $1 million remains for older debt.
  • State & Local Taxes (SALT) itemized deduction changes; $10k limit ($5k for MFJ). Notice 2018-54 has more information.
  • Individual Alternative Minimum Tax (AMT) will still remain with increased exemption amounts and phaseout levels amounts.
  • Corporate:
    • Tax rate decrease from 35% to 21%
    • Corporate ATM is repealed
    • New Qualified Business Income (QBI) deduction rates have changed, which means a 20% deduction within a certain bracket referenced on IRC Sec. 199A with set limitations for those who meet the guidelines.
    • Do to the Meals and Entertainment revisions, amounts paid after December 31, 2017 for Entertainment or Recreation (golf or sporting outings) are no longer deductible. However, the 50% limitation for business meals remains. Meals and Entertainment expenses will need to be recorded separately.
August 8, 2018 was a release of proposed regulations under 199A and is a temporary taxpayer favorable benefit through 2025.
 
Overall, 2019 tax payers will see the changes and for most of them the outcome will be a relief, not only for individual households but for corporate tax payers. Below is a link for more information about the new 7 year tax law.

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