The Tax Cuts and Jobs Act is Now Law
As noted in yesterday’s Marcum Tax Flash describing many aspects of the Tax Cut and Jobs Act, President Trump signed this legislation into law today. The act is the most significant tax legislation since the Tax Reform Act of 1986.
Some of the most impactful changes incorporated in the 2017 tax reform act include:
- Creating a top corporate rate of 21% effective for tax years beginning in 2018.
- Setting a top individual rate of 37%, down from than the 2017 top individual rate of 39.6%.
- Increasing the standard deduction for individuals to $24,000 for joint and $18,000 for head of household filers, and $12,000 for all other filers.
- Creating a 20% deduction for pass-through income and allowing trusts and estates to use the deduction.
- Repealing the corporate AMT and making significant modifications to the individual AMT so that many Americans will no longer be subject to the AMT.
- Limiting the aggregate deduction for state and local income, sales, and property taxes to $10,000.
All businesses and most individuals will be affected by the new law. Most provisions are effective beginning in 2018. For individuals, there may still be some year-end tax planning opportunities available. We suggest that you discuss these with your Marcum Tax advisor. Please also consult yesterday’s Marcum Tax Flash for a more detailed overview of changes enacted by the Tax Cut and Jobs Act of 2017.