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A Summary of Important Changes Affecting You, Your Family and Your Business.
A Summary of Important Changes Affecting You, Your Family and Your Business.
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Tax Planning Under the New Tax Cuts & Jobs Act Legislation
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With the congressional passage of the Tax Cuts & Jobs Act effective on January 1, 2018 there are many changes to both individual and business tax laws. The overall effect on individual and business income taxes can be significant and are worthy of considerable consideration as we face this new tax legislation. While one can easily access the full IRS Implementation (for individuals and business) of the new law here, we have attempted to provide a summary of the more common, yet significant changes with the RECAP video to the left and with Individual and Business excerpts of the law below.
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The significant implications to be considered are changes to: 1) individual tax rates, 2) elimination of personal exemptions, 3) increase in standard deductions, 4) limitation of the State and Local Tax Deduction. 5) an increase in cash contributions to public charities and certain private foundations, and 6) the elimination of the Miscellaneous Itemized Deductions subject to 2% of AGI. One of the obvious impacts may be the increased utilization of the standard deduction vs. utilizing Schedule A, Itemized Deductions due to the Act's limitations on the itemized deductions and the overall increase in the standard deduction. One should also pay attention to the large change in tax rates on income levels approaching/exceeding $77,400.
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STANDARD DEDUCTIONS FOR 2020
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MEDICAL EXPENSE DEDUCTION
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KEY BUSINESS TAX PROVISIONS
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There has been a lot of interest around the new Qualified Business Income (QBI) Deduction also know as Section 199A since it was included in the Tax Cuts & Jobs Act. This new provision provides a deduction of up to 20% of qualified business income and is available for sole proprietorships, partnerships, and S Corporations. The deduction, however, is subject to various rules and regulations. There may be ways to fully benefit from this new tax legislation by developing income strategies to maximize your QBI deduction.
Other Business Highlights are depicted in the video to the left. |
ALL BUSINESS IMPACT
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Tax Preparation from the comfort and safety of your home or office!
Larry E Baker, EA
Baker Tax Services LLC
5900 Jasper Street, Timnath CO 80547
(970) 300-1551 Call/Text
Baker Tax Services LLC
5900 Jasper Street, Timnath CO 80547
(970) 300-1551 Call/Text