Cordasco & Company

A Boutique Tax Firm Providing Customized Solutions.

Tax reform, which was signed into law in December 2017 was the largest tax change since 1986. To dispel any confusion, here are some important things you should know about the new law:

 – Tax rates have been reduced for all individuals by 2%-4%.

–  If you haven’t changed your withholdings already, do so. If you have, you will want to check to make sure the IRS hasn’t changed its tables, which it has done several times so far this year.

–  There were major changes to itemized deductions. The standard deduction was significantly increased ($24,000 for married couples) so most taxpayers will no longer be able to itemize.

–  Unreimbursed employee expenses and miscellaneous itemized deductions are not allowed.

–  The deduction for state and local taxes is limited to $10,000.

–  Personal exemptions have been eliminated and replaced with a child credit of up to $2,000 or $500 for non-children dependents.

–  If you are self-employed, have rental property or receive income from a partnership or S Corporation, there is a new 20% deduction on that income.

–  For businesses, the rules for depreciation have become more liberal and allow for immediate expensing of most assets purchased.

–  100% bonus depreciation is allowed for certain types of new and used assets purchased before 2022.

 – C Corporations will be taxed at a significantly lower flat 21%.

Coradsco tip: It is important to get a good understanding of the new law and plan accordingly before the end of 2018, so you do not have any unpleasant surprises. 

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