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Spotlight 15 personal tax changes

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in Small Business Tax,Small Business Tax Deduction Strategies

The Tax Cuts and Jobs Act (TCJA) enhances and creates numerous tax breaks for individual taxpayers, but repeals or scales back a slew of others.

Alert: Although the provisions for individuals are generally effective in 2018, most are scheduled to sunset after 2025.

It’s going to take time to sort out all the details, but here are 15 key items on the agenda.

1. Cash in on tax cut bonanza. The new law revamps the individual tax rate structure by reducing rates and expanding brackets for upper-income taxpayers.

Previously, the seven tax rates for individuals were 10%, 15%, 25%, 28%, 33%, 35% and 39.6%. Under the TCJA, the new rates are 10%, 12%, 22%, 24%, 32%, 35% and 37%.

In addition, the new tax law changes the Consumer Price Index used for inflation adjustments, producing smaller inflation adjustments than before.

Tip: The new law preserves favorable tax treatment for long-term capital gains and qualified dividends.

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