The Tax Cuts and Jobs Act: Big Changes

          The topic that has received the most attention on our blog has been The Tax Cuts and Jobs Act. This is more than justified considering its wide scope, and the changes it has made to the tax code. With so many adjustments, we are going to highlight a few areas that might be of special interest.

          Divorce. Going forward, those who pay alimony and have a divorce decree dated after December 31, 2018 will no longer be able to deduct the payment. The former spouse who receives the payments must now pay taxes on that income.

          State and Local Taxes. Many taxpayers in the past would itemize their return and deduct their SALT from Federal Tax responsibilities. Now that it only possible up to $10,000.

          Qualified Business Income. This would be business income that can be called “pass through” income and used to lower the Federal Tax responsibility for a business. This feature, while promoted widely, is very limited in availability. There are income and industry requirements which determine who can take advantage of this provision. It will be removed in 2026.

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