The Tax Cuts and Jobs Act was signed into law on December 22, 2017. The Act brings one of the most significant changes to the tax law in recent history. Most provisions of the act are now in effect, and they will have a substantial impact on a lot of areas of your financial and tax planning.
Here are just a few highlights:
- Significant changes in tax bracket ranges
- Highest tax bracket is now 37% instead of the previous 39.6%
- A higher level of standard deductions
- No more personal exemptions
- Elimination or reduction in many popular deductions like state and local taxes and mortgage interest
- Elimination of recharacterization for Roth IRA conversions. Roth Conversions are still allowed but will require much more precise planning upfront
- Lower corporate taxes and a new tax deduction for pass-through businesses such as shareholders of S-corporations, LLCs, and partnerships.
For more information download this “Tax Reform Is Here!” and please let us know if you have any questions.
Vladimir Kouznetsov, EA CFP®