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Accounting News

Advice and Developments

2018 Individual Tax Law Changes

  1. Tax rates are going down:

    • 2017              2018

    • 10%               10%

    • 15%               12%

    • 25%               22%

    • 28%               24%

    • 33%               32%

  2. ​Increase in Standard Deduction: 24,000 for MFJ; 18,000 for HH; 12,000 for Single

  3. The personal exemption is being eliminated.

  4. Increase in Child Tax Credit $2000

  5. No deduction for alimony payments executed after December 31, 2018

  6. Medical expense deduction floor is changing to 7.5%

  7. Moving expense deduction eliminated except for Military

  8. Mortgage interest deduction is allowed on the first $750,000

  9. Home equity loan interest will no longer be deductible

  10. State, local and real estate taxes not to exceed $10,000 total

  11. All miscellaneous itemized deductions subject to 2% floor under current law are repealed

  12. Student loan discharged after disability or death not included in taxable income

  13. Basic exclusion for estate and gift tax is 10 million which is doubled

  14. Repeal of individual healthcare mandate, no penalties on tax return starting 2019

  15. AMT threshold increased to 1 million for MFS and $500,000 for all other taxpayers

2018 Business Tax Law Changes

  1. Corporate AMT is eliminated

  2. Corporate Rate reduced to 21%

  3. Section 179 increased to 1 million

  4. Bonus depreciation allowance increased to 100% for property placed in service after 9/27/17 and before 1/1/23. Also allows on used property

  5. Vehicle depreciation for business use is increased to $10,000 for the first year of service, $16,000 for the second year, $9,600 for the third year and $5,760 for each subsequent year

  6. Entertainment expense to go away, only meals allowed

  7. Domestic production activities deduction is repealed

  8. Non-real property like kind exchanges are gone

  9. New temporary credits for employees who are on family medical leave

  10. R & D stays but requires five-year amortization of R & D expenditures

  11. NOL’s limited to 80% of taxable income for losses beginning after December 31, 2017.  Also denies the carry back for NOL’s in most cases

  12. Pass through income deduction, individuals would be allowed to deduct 20% of “qualified business income”