Well everyone…. after months of hearing about it, the President signed into law The Tax Cuts and Jobs Act on Friday. (More commonly know as the Tax Reform Bill.) There are many provisions of this bill to cover, however, I just want to focus on a few things to get done before the end of the year and a few things to keep in mind for next year.
In an overall review of this bill, I feel taxpayers from Nebraska & the surrounding states will see tax relief. As always, if you have any questions, please feel free to contact our office.
Things to get done before year-end: (In the order of importance.)
- Prepay your January 15, Estimated State tax deposits before year-end. You need to make sure they are postmarked before 12/31/17.
- Prepay your 2018 Property Taxes prior to year-end.
- Prepay your Charitable Contributions prior to year-end.
Things to think about in the new law: (We will be looking at these for you.)
- Top corporate income tax rate drops to 21%.
- Standard deduction has increased to $12,000 for single filers, $24,000 for married filing jointly and surviving spouses, and $18,000 for head of household filers.
- Affordable Health Care mandate was eliminated starting in 2019. (It is still in place for 2017 & 2018.)
- The Child Tax Credit increased to $2,000 per child under age 17.
- State and Local Tax deductions (SALT) is fully deductible up to $10,000.
- The taxable income from pass-though entities (S-Corps, Partnerships, and Sole Proprietorships) has been reduced. This area is very complex on how it is going to affect everyone, and we will be better able to talk more about this area with you during tax season.
Like I said above, this law has made a lot of changes that we will be reviewing over the next few weeks and will be better able to answer your questions during tax season. In the meantime, if you have any questions, please feel free to contact our office.