Are Your Taxes Keeping You Up at Night?
Recently, our very own Ari David dropped by the set of Real Talk Carlsbad to discuss The Tax Cut and Jobs Act of 2017.
One of the most important things to remember about the new income tax law, is how quickly it was put together and passed. The last major overhaul to our tax code happened back in 1986, and that bill was constructed and passed over an 18-month period. By contrast, the new tax laws were put together in about three months’ time. So, many parts of it are yet to be interpreted and fully understood, and a few holes might still exist. Potentially any problems within the law will be addressed via future changes. But here’s what we know for now…
- Most of the new law went into effect on January 1 of this year
- Some provisions will expire on December 31, 2025
- All business provisions are permanent, while individual provisions are the ones set to expire
- The estate tax exemption has been bumped up to $11,180,000 (per person)
- Some business tax deductions (such as meals and entertainment) might have been eliminated, but without guidance from the IRS we currently aren’t sure what will happen
- A new deduction was added, that might affect some pass-through entities (depending upon income)
- Certain pass-through businesses cannot take the above deduction
- The deduction for state and local taxes was limited to $10,000
- The mortgage interest deduction, for new mortgages, was limited to debts of $750,000 or less
Check out the video clip for more in-depth information on these parts of the new tax law. And remember, whether you’re an individual or a business, early and thorough planning is still the best way to anticipate and accommodate income tax law changes that will affect your situation.