On December 20, the House passed the reconciled tax reform bill, H.R.1, commonly called the “Tax Cuts and Jobs Act of 2017” (TCJA), which the Senate had passed the previous day. This is the most sweeping tax legislation since the Tax Reform Act of 1986.
The bill significantly reduces the income tax rate for corporations, eliminates the corporate alternative minimum tax (AMT) and makes small reductions to income tax rates for most individual tax brackets. It also provides a new tax deduction for owners of pass-through entities and significantly increases individual AMT and estate tax exemptions. In addition, it makes major changes related to the taxation of foreign income.
It’s not all good news for taxpayers, however. The TCJA eliminates or limits many tax breaks, and much of the tax relief is only temporary.
Here is a summary of some of the key changes affecting business and individual taxpayers. Except where noted, these changes are effective for tax years beginning after December 31, 2017.
Key changes affecting businesses
Key changes affecting individuals
Key changes affecting international taxation
Year-end planning opportunities still available
We’ve only briefly covered some of the most significant TCJA provisions here. There are additional rules and limits that apply, and the law includes many other provisions.
Contributed by Tyler Quinn at Weaver CPA’s