- August 30, 2018
- Posted by: mytaxprepoffice
- Category: IRS News
What about the alternative minimum tax rate (AMT)?
The AMT is still here, but with a higher exemption of $109,400 if you are Married Filing Jointly (up from $84,500), $70,300 for Head of Household (up from $54,300), and $54,700 if you are Married Filing Separately (up from $42,250). The exemption phase-out threshold is increased to $1 million for MFJ taxpayers and $500,000 for all others.
How are pass-through provisions affected?
Basically, deduct 20% of business income, and the remainder is taxed at new rates. There is some other great stuff for “immediate expensing” of business assets, and small businesses are big winners!
To keep the cost of the bill within Senate budget rules, all of the changes affecting individuals will expire after 2025. At that time, if no future Congress acts to extend these measures, the individual tax provisions would sunset, and the tax law would revert to its current state.
What are the lesser-known impacts of the legislation?
- There are no more business expense deductions. If you have been a remote employee who deducted a home office, travel, or other items, you’ve lost a large deduction.
- Annual Inflation Adjustment computation has been changed to a method that will provide a smaller increase each year.
- The Moving Expense Deduction is repealed unless you are an active-duty member of the military.
- Alimony payments are no longer deductible by the payer, and they’re no longer considered income for the recipient.
- Kiddie Tax has been simplified and reduced, and is no longer based on the parent’s tax rate.
- Taxpayers can no longer donate money to a college, sorority, or other school based organization and receive a reserved season ticket to sports events.