Reconciliation is complete!
On Friday, December 15th, the congressional conference committee
reached an agreement on The Tax Cuts and Jobs Act, H.R. 1 – the bill is
expected to be voted on this week by both houses of Congress. Here is a summary of the bills major provisions for individuals.
Rate Single (Married Filing Joint)
10% 0 – 9,525 (0
12% 9,525 – 38,700 (19,050 – 77,400)
22% 38,700 – 82,500 (77,400 – 165,000)
24% 82,500 – 157,500 (165,000 – 315,000)
32% 157,500 – 200,000 (315,400 – 400,000)
35% 200,000 –
500,000 (400,000 – 600,000)
37% 500,000+ (600,000+)
Deduction doubles $12,000 for single filers and $24,000 for married filing
a joint tax return.
There are no more personal exemptions.
and local tax (SALT) itemized deduction is limited to $10,000.
deduction remains but only on $750,000 of indebtedness.
minimum tax (AMT) remains for individuals but the exemption is increased to
$70,300 for singles and $109,400 for jointly filing taxpayers.
Credit is doubled to $2,000 phase
out raised to $500,000
Expense Deduction is available for expenses above 7.5% for 2017 & 2018,
and, 10% thereafter.
responsibility penalty is repealed meaning there is no longer a penalty for
not having health coverage.
entities from partnerships, LLC’s, or S-Corporates are permitted to deduct
a percentage of business income, effectively reducing the income tax rate on
businesses for small-business owners.
There are many rules and caveats with this provision that will be
outlined in further detail.
I have been asked questions about whether individuals can
and/or should pay state taxes in calendar year 2017 for 2018. The bill specifically prohibits the
pre-payment of income taxes, however, if you want to discuss the timing of real
estate taxes, please give me a call at 631-675-0967.
Finally, stay tuned for what the states decide to adopt because there is speculation that many of the states will not adopt all of the new tax provisions.