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2018 TAX REFORM SUMMARY (and still applicable for 2020 taxes)


The big changes from 2018 that affect your 2019 & 2020 taxes: Tax Rate Changes: Both individual and corporate rates were changed. The maximum individual rate was reduced to 37% and the corporate rate is a flat 21%. The rate change could benefit you — or in some cases cause your tax liability to go up. Standard Deduction Increases: $12,400 for Single and $24,800 for Married Filing Jointly taxpayers, and $18,650 for Head of Household. However, there are no more personal exemption deductions allowed. So this may help you — or hurt you. Increased Child Tax Credit and New Dependent Credit: The credit was increased for each child to $2,000 (up to $1,400 of which is refundable for each child) and each non-child dependent can receive a credit of $500. But you no longer have an exemption credit or deduction for yourself, your spouse, or your dependents. The phaseout thresholds for these credits are drastically increased. Married taxpayers filing a joint return can claim the full credits if their Adjusted Gross Income (AGI) is $400,000 or less ($200,000 for all others). The credits are fully phased out for married taxpayers filing a joint return when their AGI reaches $440,000 ($240,000 for all others). This means that many more taxpayers are now able to claim these credits. Disappearing Deductions: As of the 2018 tax year, you are no longer able to deduct:

  • Schedule A taxes (state income tax, real estate tax, and personal property taxes, combined) above $10,000 per year;
  • Moving expenses (with an exception for certain military);
  • Employee business expenses such as mileage, travel, entertainment, home office expenses, union dues, tax preparation fees, and investment fees, among others;
  • Mortgage interest beyond $750,000 of new acquisition debt if you purchase a home (purchased on or after Dec 16, 2017); and
  • Mortgage interest paid on equity debt unless the loan is used to "buy, build, or substantially improve" the home.
Some New Benefits for Individuals: These new benefits include:
  • The medical expense AGI threshold was set at 7.5% for all ages for tax years 2017 & 2018, and that rate was then extended to tax years 2019 & 2020 also.
  • The AMT phase-out threshold is significantly increased, so fewer middle-income taxpayers will be subject to AMT;
  • The estate tax exclusion is $11.58 million per individual in 2020; and
  • The annual gift tax exclusion is $15,000 for 2018 thru 2021, and the maximum rate on the amount of gifts above that exclusion is 40%.
Small Business Benefit: As of tax year 2018, and still available today, there is a 20% deduction from net business income for a sole proprietorship, LLC (excluding those taxed as a C corporation), partnership, S corporation, and rental activity. The rules are incredibly complex but we can work to maximize this deduction for you.




2021 TAX DUE DATES


For reporting 2020 tax information that is due in 2021 Form....................................................................................... 2021 Filing Due Dates Form W-2 (electronic or mail)........................................................February 1st Form 1065 – Partnerships............................................................ March 15th Form 1120S – S Corporations...................................................... March 15th Form 1040 – Individuals................................................................ April 15th FinCEN 114 – FBAR (will be allowed to extend)............................. April 15th Form 1041 – Trusts and Estates................................................... April 15th Form 1120 – C Corporations......................................................... April 15th Form 990 Series – Tax Exempt Org............................................... May 17th Form 5500 Series – Employee Benefit Plan................................... July 31st Form......................................................................................... 2021 Extension Due Dates Form 1065 Extended Return........................................................... September 15th Form 1120S Extended Return......................................................... September 15th Form 1041 Extended Return............................................................October 1st Form 1120 Extended Return............................................................October 15th Form 1040 Extended Return............................................................October 15th FinCEN 114 (Extended with Form 1040)...........................................October 15th Form 990 Series Extended Return....................................................November 15th Form 5500 Series Extended Return..................................................November 15th




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