Posted by Gerry Sawyer on Mar 08, 2019
Bob Drew, presented his annual tax update free seminar assisted by Rich Warfield. Today’s program is on the TCJA or Tax Cuts and Jobs Act and current tax law. All of the House and 1/3 of the Senate are up for election every even year and 2016 was also a Presidential Election. No meaningful tax legislation happens in even years but in odd years.

The last major tax overhaul was President Regan in 1986 in the middle of his second term and took 8 months to complete. President Trump made major changes one year after his election and completed the project in 8 weeks. His changes are effective January 1, 2018 and we are just starting to see returns with the new rules.
 
Rates and thresholds are reduced, the highest rate from 39.6% to 37% but what is taxable may be more or less. Dependent deductions are eliminated and child credits are increased. Deductions are are better for high tax brackets and credits are better for lower tax brackets.
 
Some things are easier, the loss of deductions, but change and new tax law is always The CPAs and Attorneys Full Employment Act. The standard deductions for MFJ increased from $12,700 to $24,000 but they eliminated the $4,050 per person dependency deduction or a net of $3,200 for a family of two. State, City and Real Estate taxes are limited to $10,000. The Medical floor for those under 65 was reduced from 10% to 7.5%.
 
Fewer people will itemize and more will use the Standard Deduction. Contact your tax expert for to load deductions cycles. Alimony after 12/31/18 is no longer deductible to payer and taxable to recipient. Casualty Losses deduction if only allowed in Federal declared diaster areas.
 
Rich Warfield passed out sheets for the 199A flowchart and tables. He talked about the 199A flowchart. This is also know as the Qualified Business Income Deduction. This is a significant tax break for small businees owners but there are rules and limits. Please see your tax professional, two are listed below.
 
Robert Drew, CPA, 330 650-4339, bobdrewcpa@aol.com
Rich Warfield, CPA, 330 655-1395