CLE Presentation by Shamsey Oloko
AN ANALYSIS OF THE TAX CUTS AND JOBS ACT
January 2018
AN ANALYSIS OF THE TAX CUTS AND JOBS ACT
On December 22, 2017, after much, well-publicized legislative skirmishes, President Donald Trump signed into law H.R. 1, otherwise known as the “Tax Cuts and Jobs Act.” Provisions affecting individuals are generally effective beginning December 31, 2017 and expire on December 31, 2025. Most business-related provisions are permanent and are effective beginning December 31, 2017.
This new law is, by all accounts, the most significant revisions to the U.S. tax code since 1986, affecting almost all individual and business taxpayers. Our firm’s general assessment of the new law will therefore be a two-part series: this first part covers changes to individual taxpayers, and the second part will cover changes to business taxpayers.
Trump’s Tax Plan Then And Now, Part 1
What specific tax plan will Donald Trump implement as President of the United States? Trump’s initial plan released in September 2015, set forth four tax brackets of 0%, 10%, 20% and 25%. In October, just prior to the election, he released a new plan that adopted the House Republicans’ approach using three tax brackets, 12%, 25% and 33%. Either plan seems to adopt aspects of the tax reform pursued by House Republicans, as the president-elect moves closer to the Republicans’ tax agenda. Here’s a look at Trump’s tax plan then and now.
Can You Defer Your 2016 Income To 2017?
The end of the year is the perfect time for taxpayers to make financial adjustments to lower their tax bill for the current year. Making adjustments to income may help reduce tax liability. Income is typically taxed in the year it is received, however, if you don’t have to pay tax today and may pay it tomorrow, why not? Deferring income is an excellent strategy to lower an annual tax bill. However, only taxpayers that expect their tax bracket to remain the same or decrease to a lower bracket should defer income.
Tax Treatment of Business Entities Part 5: S Corporations
Startup business owners must consider the legal and tax considerations associated with selecting a particular type of business structure. This is the fifth part of a series of blogs on the tax treatment of business entities. This final segment will address the tax treatment of S corporations.
S corporations are entities that elect to pass corporate income, losses, deductions, and credits through to their shareholders who report any flow-through income and losses on their personal tax returns and taxed at individual income tax rates, similar to a partnership. Thus, S corporations avoid double taxation on corporate income, unlike C corporations. However, S corporations are responsible for tax on some capital gains and passive income at the corporate level. The rules for Subchapter S corporations are found in Subchapter S of Chapter 1 of the Internal Revenue Code.
Part 1 – What If: Job Related Life Events And Struggling Taxpayers
If you have any type of financial difficulty, keep in mind that there’s a tax impact to events such as job loss or foreclosure. Such consequences may not necessarily be predominantly negative. For example, if your income decreased, you may be newly eligible for the Earned Income Tax Credit or other tax credits, which is a good thing.
Of the utmost importance when facing some financial obstacle is to contact the IRS immediately if you believe that you may have trouble paying your tax bill. Please see our blog You Can’t Pay Your Tax Bill in Full You Have Options…An experienced and knowledgeable tax attorney may help ease any financial burden. Remember that to avoid additional penalties, you also should always file a tax return even if you are unable to pay.
Who Claims The Kids On Their Taxes, And Other Ways Divorce May Affect Your Taxes
Divorcing couples often wonder who claims the children on their taxes, and in what other ways divorce will affect their taxes. Questions may include which filing status to use after the divorce, and how payments for spousal maintenance and child support to an ex-spouse are treated for tax purposes. Also, inquiries about what happens to assets like the family residence are obviously frequently common.
Filing Status