CHICAGO (Oct. 31, 2018) – Last December, the Tax Cuts and Jobs Act (TCJA) was signed into law, the most sweeping tax legislation since 1986. To help businesses and individuals navigate the new tax landscape and minimize their tax burden, Crowe has now issued “Tax Planning: 2018 Year-End Guide.” Crowe is a public accounting, consulting and technology firm with offices around the world.
The TCJA made small reductions to income tax rates for most individual tax brackets and substantially reduced the income tax rate for corporations. However, to offset these rate reductions, a number of popular tax breaks were limited or eliminated. According to Gary Fox, managing partner of Crowe tax services, much of the tax relief provided is only temporary. “Unless Congress acts to make the cuts permanent, timing your income and expenses is critical this year and during the next few years,” he said. “Working closely with a tax adviser can help you identify which changes affect you and the best strategies for maximizing the new law’s benefits, while minimizing negative tax ramifications.”
Additionally, the TCJA substantially increased alternative minimum tax (AMT) exemptions, which means fewer tax payers will have to pay the AMT. There are now fewer differences between what’s deductible for AMT purposes and regular tax purposes, which will also reduce AMT risk. Fox noted that the AMT will still remain a threat for some higher-income taxpayers.
For tax years from 2018 through 2025, the TCJA created a new deduction for owners of pass-through business entities, such as sole proprietorships, partnerships, S corporations and limited liability companies treated as sole proprietorships or partnerships for tax purposes. The deduction generally equals 20 percent of qualified business income (QBI), subject to limitations that begin to apply if taxable income exceeds $315,000 for married taxpayers or $157,500 for single taxpayers. This QBI deduction isn’t allowed in calculating the owner’s adjusted gross income, but it reduces taxable income.
The guide also includes deeper insights on the following topics:
To download the guide, please visit www.crowe.com/insights/asset/t/tax-planning-2018-year-end-guide.
Crowe LLP (www.crowe.com) is a public accounting, consulting and technology firm with offices around the world. Crowe uses its deep industry expertise to provide audit services to public and private entities. The firm and its subsidiaries also help clients make smart decisions that lead to lasting value with its tax, advisory, risk and performance services. Crowe is recognized by many organizations as one of the best places to work in the U.S. As an independent member of Crowe Global, one of the largest global accounting networks in the world, Crowe serves clients worldwide. The network consists of more than 200 independent accounting and advisory services firms in more than 130 countries around the world.
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