Calvert County Times January 11, 2018 - Page 8

8 Local News The Calvert County Times Thursday, January 11, 2018 Highlights of the New Tax Reform Law It’s always good to get your taxes done as early as possible, advises Robert Askey, partner of the Leonar- dtown CPA firm of Askey and Askey Associates. Of course, if you are getting a deduction you will get it quicker. But, also because of the tax law changes, if you must pay more than expected, you’ll have more time to round it up. Askey said that also late filers historically have been more prone to ID theft. The biggest challenge Askey said, is the loss of the personal exemption. Where heretofore some taxpay- ers, including businesses have been able to itemize, this year they may not. For instance, the hone office deduc- tion is now out the window. The impact on individual and business taxpayers de- pends on one’s own personal situation. Here’s a run- down on the changes as prepared by Askey and Aske and Associates for their clients: The new tax reform law, commonly called the “Tax Cuts and Jobs Act” (TCJA), is the biggest federal tax law overhaul in 31 years, and it has both good and bad news for taxpayers. Below are highlights of some of the most significant changes affecting individual and business taxpayers. Except where noted, these changes are effective for tax years beginning after December 31, 2017. Individuals Drops of individual income tax rates ranging from 0 to 4 percentage points (depending on the bracket) to 10%, 12%, 22%, 24%, 32%, 35% and 37% — through 2025 Near doubling of the standard deduction to $24,000 (married couples filing jointly), $18,000 (heads of households), and $12,000 (singles and married couples filing separately) — through 2025 Elimination of personal exemptions — through 2025 Doubling of the child tax credit to $2,000 and other modifications intended to help more taxpayers benefit from the credit — through 2025 Elimination of the individual mandate under the Af- fordable Care Act requiring taxpayers not covered by a qualifying health plan to pay a penalty — effective for months beginning after December 31, 2018 Reduction of the adjusted gross income (AGI) thresh- old for the medical expense deduction to 7.5% for regu- lar and AMT purposes — for 2017 and 2018 New $10,000 limit on the deduction for state and lo- cal taxes (on a combined basis for property and income taxes; $5,000 for separate filers) — through 2025 Reduction of the mortgage debt limit for the home mortgage interest deduction to $750,000 ($375,000 for separate filers), with certain exceptions — through 2025 Elimination of the deduction for interest on home eq- uity debt — through 2025 Elimination of the personal casualty and theft loss deduction (with an exception for federally declared di- sasters) — through 2025 Elimination of miscellaneous itemized deductions subject to the 2% floor (such as certain investment ex- penses, professional fees and unreimbursed employee business expenses) — through 2025 Elimination of the AGI-based reduction of certain itemized deductions — through 2025 Elimination of the moving expense deduction (with an exception for members of the military in certain cir- cumstances) — through 2025 Expansion of tax-free Section 529 plan distributions to include those used to pay qualifying elementary and secondary school expenses, up to $10,000 per student per tax year AMT exemption increase, to $109,400 for joint fil- ers, $70,300 for singles and heads of households, and $54,700 for separate filers — through 2025 Doubling of the gift and estate tax exemptions, to $10 million (expected to be $11.2 ֖Ɩf"#vFfFFWr( BF&Vv##P'W6W76W0&W6VVBbw&GVFVB6'&FRF&FW0&vrg&RRF3RRvFfB6'&FR&FPb#P&WVbFR#R6'&FR@Wr#RVƖfVB'W6W726RFVGV7Ff vW'2bfrF&VvVFFW27V62'FW'62Ɩ֗FVBƖ&ƗG6W2B26'&F2@6R&&WF'62( BF&Vv##PFV&Ɩrb&W2FW&V6FFRBWЧ6bVƖfVB76WG2F6VFRW6VB76WG2( @VffV7FfRf"76WG27V&VBB6VB6W'f6RgFW 6WFV&W"#r#rB&Vf&RV'##0FV&ƖrbFR6V7FsWV6rƖ֗BFC֖ƖB7&V6RbFRWV6r6VW@F&W6BFC"R֖ƖFW"V6VVG2FFW&V6F&VFV@FVGV7F0WrF6v6RbFVGV7F2f"WBFW&W7BWЧV6RW6W72b3RbFR'W6W7>( 2FW7FVBFЦ&R6RW6WF2ǒWrƖ֗G2WBW&Fr72’FVGV7F0VƖ֖FbFR6V7FFVGV7F66Цǒ&VfW'&VBF2FRFW7F2&GV7F7FfFW0FVGV7F"Vf7GW&W'>( FVGV7F( BVffV7FfRf FV'2&VvrgFW"FV6V&W"3#rf"Ц6'&FRFW'2Bf"FV'2&VvrgFW FV6V&W"3#f"26'&FFW'0Wr'VRƖ֗FrƖRֶBW6vW2F&V&ЦW'GFB2BVB&&ǒf"6PWrF7&VFBf"VW"Bf֖ǒBVF6VfR( BF&Vv#WrƖ֗FF2W6W76fRVVR6V6FWrƖ֗FF2FVGV7F2f"VVRg&vP&VVfG27V62VFW'FVBB6W'F6&7VЧ7F6W2V2BG&7'FF&RF66FW F22W7B'&VbfW'fWrb6RbFR7B6rЦf6BD4&f62FW&R&RFFF'VW0BƖ֗G2FBǒBFRr6VFW2BЦFF&f626F7BW"FGf6"FV&&R&WBrFW6RBFW"Fr6vW2vffV7BR#B&WBfW"#S6WFW&'FW'06( B&Rw&rW"ƖR6VGf"6&W26fW'BB7B'( 26VFW0wwr6B6