Tax Reform Updates: Keeping You Informed
President Donald Trump signed tax reform legislation into law on Dec. 22, 2017. The final bill reflects three minor changes relative to the House and Senate conference committee agreement, including removal of a rule permitting use of a 529 savings account for home-schooling expenses, an update to the title of the billand a change to the criteria for imposing a new excise tax on endowments of private colleges and universities. The VSCPA is offering the following resources and educational offerings:
- Best Federal Tax Update, 8 a.m. – 3:30 p.m.
This course will keep you up-to-speed on all recent developments regarding tax reform as well as major trends and changes in case law.
- Jan. 23: Richmond CPA Center
- 8 CPE credits
- $389/members, $489/nonmembers
|Don Farmer, CPA, will be presenting an 8-hour update seminar! Choose from the options below:|
- Don Farmer's Tax Reform Update, 8 a.m. – 4 p.m.
- Jan. 29: Hilton Richmond Hotel & Spa, Short Pump
- Jan. 29: online — EVENT FULL
- JUST ADDED! Feb. 1: online REPLAY of previously recorded seminar
- 8 CPE credits
- $275/members, $375/nonmembers BEFORE Jan. 19, 2018
- Surgent's Understanding Section 199A: The 20% Deduction for Pass-Through Entity Owners & Investors in Real Estate
Now that the new tax bill has gone public, how does the 20% deduction for pass-through entity owners work? Find out during this webinar.
- Understanding the Tax Cuts & Jobs Act of 2017
Review the legislative changes resulting from the tax bill and discover how they will affect compliance and planning needs of your clients.
- Surgent's Critical Tax Reform Updates for CPAs: The Tax Cuts & Jobs Act
This 4-hour webinar covers the new law in a practical way so you not only know what the changes are, but also appreciate how these changes both individual and business clients.
- After Tax Reform: Travel & Entertainment Expenses Review & Update
Review the statutory and regulatory guidance resulting from the 2017 Tax Cuts and Jobs Act as they relate to travel, entertainment and business transportation expenses, with a focus on planning opportunities.
- After Tax Reform: The Flow Through Entities Deduction
Discuss the calculation of the 2017 Tax Cuts and Jobs Act deduction for flow through entity income.
- After Tax Reform: Taxation of Nonprofits
Discuss the provisions of the 2017 Tax Cuts and Jobs Act that impact nonprofits.
- After Tax Reform: Choice of Entity
Discuss the provisions of the 2017 Tax Cuts and Jobs Act that impact the choice of entity.
- After Tax Reform: Capitalization, Depreciation & Disposition
Discuss the provisions of the 2017 Tax Cuts and Jobs Act that impact capitalization, depreciation and disposition of assets.
- After Tax Reform: Individual Tax Update & Recent Developments
Discuss the provisions of the 2017 Tax Cuts and Jobs Act that impact individual taxpayers.
- March 26, noon – 2 p.m.
- 2 CPE credits
- After Tax Reform: Business Tax Update & Recent Developments
This program will address the impact of the 2017 Tax Cuts and Jobs Act, with a focus on important provisions, rules and concepts to business tax returns.
- March 30, 11:30 a.m. – 1:30 p.m.
- 2 CPE credits
Overview of Changes
|Current Law||New Law|
|Personal rates||Seven brackets: 10%, 15%, 25%, 28%, 33%, 35%, 39.6%||Seven brackets: 10%, 12%, 22%, 24%, 32%, 35%, 37%|
|Personal long-term capital gains and qualified dividend rates||Up to 23.8%||Unchanged; rates tied to existing taxable income thresholds|
|Maximum pass-through tax rate||39.6%||Ordinary rates with deduction of 20% of qualifying domestic income; limited deduction for income from lower-income service businesses, excluding engineers and architects|
|Maximum corporate tax rate||35%||21%|
|Personal standard deduction||
Married filing jointly: $12,700
|Married filing jointly: $24,000
Head of household: $18,000
|Child tax credit||$1,000 per child||
$2,000 per child (refundable to $1,400 per child)
|Personal state income, sales tax and property tax||Allowable as itemized deduction||Deduction for property tax and either income or sales tax limited to $10,000|
|Mortgage interest||Deductible on up to $1.1 million of debt; interest on second home deductible||Deductible on up to $750,000 of debt, including second home; no home equity interest deduction|
|Individual Alternative Minimum Tax (AMT)||Imposed when minimum tax exceeds regular income tax||Increases AMT exemption amounts and phase-out|
|Medical expenses||Deductible to the extent they exceed 10% of adjusted gross income (AGI)||Deductible to the extent they exceed 10% of AGI (7.5% of AGI for 2017 and 2018)|
|Alimony||Deductible to payor, taxable to recipient||Not deductible to payor, not taxable to recipient for decrees executed or modified after 2018|
|Individual health insurance mandate||Individuals penalized for failure to carry minimum essential health insurance coverage||Repealed|
|Depreciation||Fixed assets generally capitalized and depreciated; in some cases, Section 179 immediate expensing of up to $500,000 is available||Immediate expensing of most new and used property (excluding structures) through 2022; Section 179 limit increased to $1 million|
|Net operating losses (NOL)||Generally carried back two years and forward 20 years||Carryback repealed except for farms, which are left at two years; indefinite carryover deduction limited to 80% of pre-NOL income for losses generated after 2017|
|Excess business loss||No provision||Net business losses in excess of $500,000 ($250,000 single) not deductible and become an NOL carried over to the next year|
|Business interest||Generally deductible||Generally limited to the extent that interest exceeds 30% of income, unlimited carryover of excess. Determined at entity level, but spillover effects to owner. Limitations not applicable if average annual gross receipts do not exceed $25 million|
|Cash method of accounting||Generally limited to businesses with less than $1 million, $5 million or $10 million in receipts, depending on facts||Expanded to include businesses with less than $25 million in receipts with special rules for tracking inventory costs|
|Domestic production activities deduction||Domestic producers eligible for deduction equal to 9% of qualifying income||Repealed after 2017|
|Corporate AMT||20%||Repealed after 2017; AMT credits refundable from 2018-2021|
|Gift and estate tax||Tax of up to 40% imposed on gifts and estates, subject to $5.49 million lifetime exemption per spouse||Lifetime exemption doubled, estate tax remains in effect, step-up in basis retained|
News & Resources
- AICPA Tax Reform Webcast
A Dec. 22 webcast from the AICPA summarizing changes included in the tax reform bill. NOTE: No CPE credit will be given for viewing this webcast.
- Tax Bill: How 4 Healthcare Measures Weathered Reconciliation
From a lynchpin of the Affordable Care Act to a decades-old drug research tax credit, lawmakers had considered several provisions that would impact healthcare. Not all survived. The healthcare impacts of the GOP’s tax reform plan came into focus...
- President Trump Signs Tax Reform Into Law
President Donald Trump on Friday signed into law H.R. 1, known as the Tax Cuts and Jobs Act, which makes widespread changes to the Internal Revenue Code. Almost all of its provisions, including a lower corporate tax rate of 21 percent and lower...
- Tax Reform Passes Both Houses of Congress, Moves to Trump's Desk
This week, both houses of Congress passed a tax reform bill titled “To provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,” also known as the Tax Cuts and Jobs Act....
- Tax Reform Bills Pinch Nonprofit Hospitals with Pricier Debt
Nonprofit hospitals came up for air last month as the House passed its version of the tax reform bill. One provision, in particular, pertaining to tax-exempt bonds threatened to drive up the cost of debt for capital improvement projects slated to...
- Senate Passes Tax Reform Bill, but it Isn't Over Yet
On Saturday, Dec. 2, in the early morning hours, the Senate voted to pass the “Tax Cuts and Jobs Act,” after vigorous debate and a number of amendments. The bill, which needed only 50 votes to pass (with Vice President Mike Pence as a...
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