Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Sunday, January 6, 2019

Big Changes in Tax Law: New Rates Likely to Affect Everyone

TaxesThough having to pay taxes is a constant of life, the particulars of the tax law changes with every year. 

“The biggest tax law change in 30 years is in effect for 2018. Everyone, whether their tax situation is simple or complex will be impacted,” says ENJ Financial Tax Manager Whitney Gum, CPA. The major changes are larger brackets and a drop in rates, meaning the same taxable income last year will be at a lower rate.

Some itemized deductions may be limited, but could include medical expenses, state and local taxes, mortgage interest and donations to charities. The local and state tax deductions have a cap at $10,000, and corporate tax rate has decreased to a flat 21%.

“Another huge change, is the implementation of the Qualified Business Income Deduction (QBID),” Gum said. “This is a 20% deduction equal to the amount of qualified business income of sole proprietorships, partnerships, and S corporations. This is an area where planning is very important to make sure the taxpayer is receiving the maximum benefit of this deduction.”

See Dawnita Fogleman, Big Changes in Tax Law: New Rates Likely to Affect Everyone, Woodward News, January 1, 2019.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

https://lawprofessors.typepad.com/trusts_estates_prof/2019/01/big-changes-in-tax-law-new-rates-likely-to-affect-everyone-.html

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Comments

I think that the real big change for taxpayers will be in states with high tax burdens from the municipality, county and state. The past allowed all of that tax burden to be deducted from your income taxes but 2018 it is capped at $10,000 which will hit these taxpayers living in these "high tax states" in a big way. My guess is that it will put a lot of pressure on law makers from these states to reduce the tax burden in a meaningful way or prepare to face the consequences of more people moving out of these states to more "tax friendly" states.

Posted by: Brian Ward | Feb 25, 2019 12:09:31 AM

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