Ten Huge Take-Aways from the Tax Cuts and Jobs Act of 2017
However, Lange believes it is incredibly important that Americans understand the main provisions of the 400+ page bill so that they can begin to assess its impact on their families.
Until we know more, here are
1. This doesn't appear to be an overall tax-cut for the middle class, as promised. What we see in this bill is a tax cut for some, and a tax hike for others. As usual, it all depends on how much you make, how you earn your living, where you live, the mortgage on your home, your property taxes, student loans, etc. The Tax Policy Center commented that the bill wasn't really tax reform but rather it was a complicated tax cut. We have compared differences for hypothetical clients and the results were somewhat different than we expected. In one case, the elimination of the alternative minimum tax was helpful, but the disallowance of state and local income taxes netted out to a tax increase.
2. The bill reduces the number of tax brackets from seven to four. Currently the brackets are 10-15-20-28-33-35-39.6%. Under the new provisions there will be a zero bracket (in the form of an enhanced standard deduction according to the bill), and from there, the brackets will be 12-25-35-36.9%. Additionally, the bill would eliminate the alternative minimum tax (AMT), a second tax calculation for people earning about
3. The bill doubles the current standard deduction, giving
4. Before you get too excited about a larger deduction, they've decided to repeal the personal exemption—currently
5. No more recharacterization of
6. Taxpayers with a net worth of
7. Reducing the corporate tax rate from 35 to 20 percent, Speaker
8. The Act is silent on what we call the "Death of the Stretch IRA." We feel that there will be legislation killing the tax-deferral benefits of inherited IRAs for non-spousal beneficiaries. Even though this provision is not specified in the current version of the bill, it is very possible that they are holding it in reserve for future negotiations pertaining to reducing the deficit. Killing the ability to stretch IRAs and retirement plans for generations is one to offset the decreased revenue.
9. Even the Republican's admit that this bill will increase the deficit by
Jim's advice to most taxpayers in light of these changes? Don't overreact! "Do your regular year-end tax planning, just be a bit more conservative with regard to Roth IRA conversions, because of the potential inability to recharacterize. And work with a knowledgeable professional to help you navigate whatever provisions do make it into law."
Media Contact:
News distributed by PR Newswire iReach: https://ireach.prnewswire.com
SOURCE
UCB’s VIMPAT® (lacosamide) now approved by FDA to treat partial-onset seizures in pediatric epilepsy patients
Morning Spin: Republican leader wants sexual harassment hotline in wake of Capitol scandal
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News