2018 Early Tax Planning – Six Steps Starting Now!

John (Rusty) Davis, CPA

Less than 5 weeks ago, the “Tax Cuts and Jobs Act” (TCJA) was signed into law, the most significant overhaul of federal tax laws since 1986. The new tax bill has triggered a frenzy of political, media, and financial chatter. But that chatter has now transformed into urgent action in the tax profession, with the IRS and States mobilizing, software companies scrambling, and taxpayers looking for answers. Consequently, there is no time to waste on the debate, as we all need to get down to business – now. Following is a 6-step process to quiet the chatter and begin to…

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IRS Issues 2018 Withholding Tables for Tax Cuts and Jobs Act Changes

John (Rusty) Davis, CPA

IRS has issued new income tax withholding tables for 2018 that reflect changes made by the Tax Cuts and Jobs Act (TCJA). It also issued an information release and frequently asked questions that explain the use of the new tables. TCJA made major changes to the income tax rates, increased the standard deduction, and did away with personal exemptions, effective for tax years beginning after Dec. 31, 2017. IRS has now released Notice 1036, Early Release Copies of the 2018 Percentage Method Tables for Income Tax Withholding, which updates the income tax withholding tables for 2018 to reflect changes made…

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2018 New Tax Law Highlights for Individuals

John (Rusty) Davis, CPA

Following is an overview of some of the more important individual 2018 tax changes in the new “Tax Cuts and Jobs Act”. Standard deduction. The new law increases the standard deduction to $24,000 for joint filers, $18,000 for heads of household, and $12,000 for singles and married taxpayers filing separately. Given these increases, many taxpayers will no longer be itemizing deductions. These figures will be indexed for inflation after 2018. Exemptions. The new law suspends the deduction for personal exemptions. Thus, starting in 2018, taxpayers can no longer claim personal or dependency exemptions. The rules for withholding income tax on…

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2018 New Tax Law Highlights for Business Entities

John (Rusty) Davis, CPA

Following is an overview of some of the more important business tax changes in the new law. Unless otherwise noted, the changes are effective for tax years beginning in 2018. Dividends-Received Deduction. The dividends-received deduction available to corporations that receive dividends from other corporations has been reduced under the new law. For corporations owning at least 20% of the dividend-paying company, the dividends-received deduction has been reduced from 80% to 65% of the dividends. For corporations owning under 20%, the deduction is reduced from 70% to 50%. Net Operating Loss (“NOL”) Deduction Modified. Under the new law, generally, NOLs arising…

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