Hilda Hanson CPA, LLC tax planning and tax preparation/resolution can help you with The Tax Cut and Jobs Act which is now law. Detailed below is the Tax Cut and Jobs Act calcultor button and some of the changes to the tax code that you can expect to see when it comes to filing your 2019 taxes.
Use this tax CALC XML calculator tool to help estimate your potential 2019 tax liability under the new tax law. Also, be sure to use the calculator to determine if you need to change your payroll withholding for 2019.
2018 Tax Cuts and Jobs Act Changes:
There will continue to be seven personal tax brackets in 2019. The personal tax brackets will be as follows: 10%, 12%, 22%, 24%, 32%, 35% and 37%, as detailed below:
Small business owners who are setup as S-Corporations or Limited Liability companies and receive pass-through income via a K-1 or form 1065, will be allowed to deduct 20% of their income prior to applying the personal income tax rates up to certain qualifying income limits, and the corporate rate will be cut from 35% to 21%.
Other features of H.R. 1, Tax Cuts and Jobs Act, are:
1. double the standard deduction as detailed below:
$12,000 for single filers, and
$24,000 for married filing jointly
2. Completely eliminate personal exemptions.
3. State, local and property taxes deductions for those itemizing will be capped at $10,000.
4. It also expands the medical expense deduction for two years for filers meeting that threshold from 10% AGI to 7.5% AGI.
5. Mortgage interest will be deductible for mortgages up to $750,000.
6. The child tax credit will increase from $1,000 to $2,000 per child under 17 years of age with $1,400 of the $2,000 potentially refundable. Filers with dependents who do not qualify for the child tax credit will be able to claim a $500 credit for each dependent.
7. The bill also repeals the individual mandate to purchase health insurance beginning 2019.