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.
How Your Job Hunt Could Lower Your Taxes
For taxpayers seeking a new job in their same line of work, a tax deduction for some job search expenses may be available. First and foremost, these expenses must be related to a job search in a taxpayer’s current occupation, as expenses related to a search for a job in a new occupation may not be deducted. If an employer or third party provides reimbursement for the expense, it may not be deducted.
Here are some expenses that may be deducted:
- Employment and job placement agency fees;
- Costs of preparing, copying and mailing résumés to prospective employers;
Finally! Congress Enacts Tax Extends Part 1
The Consolidated Appropriations Act of 2016, enacted Dec. 18, 2015, extends a long list of expired tax provisions into the future. Unlike past extension legislation, Congress extended many provisions permanently. In more traditional fashion, some of the others were extended for five years, and many for two years. The Joint Committee on Taxation estimates that the total cost of the tax provisions in the bill will be $622 billion over 10 years. Without Congress extending these various provisions, millions of Americans were in danger of losing these beneficial tax breaks by 2017.
Children And Tax Credits: The Child Tax Credit
The popular $1,000-per-child tax credit was made a permanent part of the tax code by the American Taxpayer Relief Act. Depending upon a parent’s income, the Child Tax Credit is an important and useful tax credit that may be worth as much as $1,000 per qualifying child under the age of seventeen (17). A qualifying child for this credit is someone who meets the criteria of six tests: age, relationship, support, dependent, citizenship, and residence.
Age Test – To qualify, a child must have been age 16 or younger at the end of the applicable tax year.
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
Tax Provisions Of The Trade Preferences Extension Act of 2015
As well as the trade provisions that were the bill’s focus, the Trade Preferences Extension Act of 2015 (H.R. 1295), signed into law in June of 2015, contains provisions regarding tax law. The Act revises several Tax Code provisions, and extends a number of trade agreements as well as programs like trade adjustment assistance (TAA) and the Health Coverage Tax Credit (HCTC). TAA consists of programs that provide federal job training and assistance to workers, firms, farmers and communities that have been adversely impacted by foreign trade.