This month’s Office Hours Kennett is sure to be illuminating. It can’t be anything else. The 2018 Tax Reform legislation has left business filers as well as personal tax filers with many questions.
If you are one of the early filers, you may have already discovered that many of your assumptions on taxes owed and refunds has pretty much been turned upside down. The following is a brief break down provided by Forbes Community Voice of some of the effects felt by most taxpayers and small businesses.
Just like any new year, there are changes to tax law. But with 2018 and the Tax Cuts and Jobs Act (TCJA), many new tax provisions are in full effect. The most significant changes introduced by this new tax reform include decreasing the maximum tax rate and reducing the number of tax brackets from 14 to 2. Here is a brief list of what changes you will need to look for in 2018:
• Income averaging for most taxpayers has been eliminated. Want to add a caption to this image? Click the Settings icon.
• Unemployment income is now fully taxable.
• The new kiddie tax intends to dissuade parents from reducing their taxes by moving investments into their children's name.
• IRA contribution deductions are now limited.
• You are now required to list dependent Social Security numbers on personal returns to reduce fraud.
• The Investment Tax Credit has been discarded.
• The TCJA has repealed the dividend exclusions.
It is worth noting is that other aspects of the TCJA that aren't mentioned here can affect your business. However, the changes outlined above are the ones that will have an effect on the vast majority of small businesses.
Office Hours Kennett is proud to tackle this very topical subject as Doug Kook CPA, CVA of Bumpers & Company breaks down this complex topic . You will not want to miss *2018 Tax Reform Update* on February 28th at The Creamery @4pm. Register today!