Tax Changes

 

 

Tax Changes 2018 – Connecticut

Tax Cuts and Job Act (December 20, 2017)
  Public Law no. 115-97
                       
  THE GOOD   THE BAD
                       
  Standard Deduction         Personal Exemptions      
  2017 $6,350 Indiv; $9,350 Head of Household   2017 $4,050 per dependent    
    and $12,700 for Joint filers.     2018 Repealed      
  2018 $12,000 Indiv; $18,000 Head of Household            
    and $24,000 for Joint filers.     Personal Property Tax and State/Local Taxes (“SALT”)
              2017 Unlimited      
  Individual Tax Rates and Brackets       2018 Limited to $10,000 of combined property 
  2017 Similar as prior year         state, local taxes and sales taxes.  
  2018 Same number of brackets (7) but each one is             
    lower percentage by 1-4%.     Mortgage Interest      
              2017 Deductible for total mortgage debt of up to 
  Qualified Pass-Through Income Deduction       $1,000,000 – phased out on excess balance.
  2017 None         2018 Deductible for new mortgages up to $750,000
  2018 20% deduction for qualified Partnerships     on primary residence only.   Reverts back to 
    S-Corp, and sole proprietorship income.     the $1,000.000 debt on new personal residences
                in 2026, but no provision to return the tax break
  Individual Alternative Minimum Tax (AMT)       for second home mortgages.  
  2017 Basically the same as prior year.              
  2018 Increased Exemption and Phase outs.   Moving Expense Deduction    
              2017 Allowed for Job related moves  
  Child Credits         2018 Repealed      
  2017 $1,000 per qualifying child under 17              
    years old – phase out at $75,000 for      Alimony        
    Individual filers and $110,000 for joint   2017 Deductible to payer; taxable to recipient.
    filers         2018 Repealed for decrees settled after   
  2018 $2,000 per qualifying child under 18       2018.  Prior divorces are not impacted.
    years old – phase out at $200,000 for             
    Individual filers and $400,000 for joint   2% Miscellaneous Deduction    
    filers         2017 Qualified Deductions such as tax preparation 
                fees, investment advisory fees, unreimbursed
  Other Dependent Credit         employee expenses are a qualifying itemized
  2017 No additional credit for other dependents.     deductions subject to a 2% floor of AGI.
  2018 New $500 credit for Other Dependents.   2018 Repealed      
                       
  Healthcare Mandate         Home Equity Loans      
  2017-18 Penalty if no health care coverage.     2017 Deductible on itemized deductions.
  2019 Repeals the penalty for Individual Mandate.   2018 Repealed, until 2026 and allowed thereafter
                on debt up to $100,000.    
  Medical Deductions                  
  2017 Itemized deduction allowed after 7.5% floor of    Casualty Losses      
    AGI is reached for ages 65 and over; 10% floor   2017 Personal losses deductible to the extent that
    of AGI those younger than 65 must be reached.     loss exceeds 10% of AGI.  
  2018 Itemized deduction allowed for everyone    2018 Loss can be claimed only in the case of a disaster
    regardless of age, after 7.5% floor is reached.     that is declared by the President.  Provision
                expires after 2025.    
  Gift Tax Provision                  
  2017 $14,000 gift from each person.     Net Operating Loss Deduction    
  2018 $15,000 gift from each person.     2017 Carryback NOL 2yrs/Carryforward 20yrs.
              2018 Deduction limited to 80% of taxable
  Corporate Tax Rate           income for NOLs arising in 2018 and  
  2017 Brackets range from 15-38%.       forward.      
  2018 New provision set at 21% across the board            
              Roth IRA Re-Characterization    
  Estate Tax Provision         2017 Allowed and taxable upon re-characterization.
  2017 Exemption is $5,600,000 per person.   2018 Repealed      
  2018 Doubles exemption to $11,200,000 per person.