McFarlin & Brokke, PC Certified Public Accountants (386) 882-6047
McFarlin & Brokke, PCCertified Public Accountants   (386) 882-6047

Income Taxes

On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act, a 1,101 page document into law.

 

 

Here is an overview of some key elements:

What the Law Means for Small Businesses

Corporate tax rate. The final bill reduces the corporate tax to a 21 percent flat rate from today's progressive tiered tax rate, which generally ranges from 15 to 35 percent.

 

Pass-through deductions. The bill allows deductions for qualified business income for pass-through entities (partnerships, LLCs, sole proprietorships, S Corporations) of up to 20 percent. Complex rules and limitations apply. This provision falls under the individual tax code and would sunset in 2026 without additional legislative action.

 

What the Law Means for Individuals (2025 Sunset Date)  

Individual withholding rate changes. The bill offers seven progressive withholding rates of 10, 12, 22, 24, 32, 35, and 37 percent (previous rates were 10, 15, 25, 28, 33, 35, and 39.6 percent). The bill also changes the tables that break down the wages to which each of these rates apply. 

 

Increase in the standard deduction. The new law almost doubles the standard deduction to $12,000 for single filers, $24,000 for married joint filers, and $18,000 for heads of household (in 2017, the deductions were $6,350, $12,700, and $9,350, respectively).

 

Child tax credits and repeal of the personal exemption. While deductions for personal exemptions have been repealed, the child tax credit will increase from $1,000 to $2,000. An additional $500 family credit for non-child dependents has also been created. The bill also raises the income level for the credit phase-out, so more taxpayers would be eligible for the maximum credit. 

 

 

 

Where to Find Us:

McFarlin & Brokke CPA
99 South Yonge St
Ormond Beach, FL 32174

Email:  Kathyk@mcbrok.com
Phone:  (386) 882-6047

  

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What's New

Add Income Tax Planning to your Year-End Calendar-

 

Year-end tax planning is more complicated this year than in most years. With the possibility of major tax change just ahead, many standard tax-cutting moves are turned upside down. There’s not much time left for making changes that could affect your taxes for 2017.  Call us to schedule your tax planning appointment, (386) 882-6047



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