Heidman Law Firm

Blog: 2018 Tax Act Update

December 19, 2017

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The bill has not been passed but the Congressional Conference Committee has struck a deal on tax reform.  From an estate planning standpoint, they are doubling the federal estate tax exemption to what will be $11.2 million in 2018.  This is a per person exemption from federal estate tax and eliminates virtually everyone except for the ultra-rich.

There was a big fight over the deductibility over income tax paid to states which is permitted when you itemize deductions.  Coupled with that was a cap on the amount that you could take on home real estate taxes which initially was $10,000.00.  They have now combined the two together so that the cap on total state income tax and real estate taxes which you can itemize is $10,000.00. 

The corporate tax, currently 35%, had been slated in the prior bills to go to 20% but they have comprised that to 21% which now begins in 2018, not 2019. 

Certain individuals that work for a business with pass through income (such as an LLC or Subchapter S Corporation) now will allegedly get a deduction of 20% of their pass through income, a drop from the 23% that the Senate had suggested. 

Exactly how the changes will affect you, your family, and your business are still to be seen.  Keep informed.

This blog post is meant for informational purposes only and is not meant to provide legal advice in any particular circumstance or factual situation.  You should consult with an attorney prior to taking any action regarding the information contained herein.  If you have questions concerning this post, please contact Daniel.Dykstra@heidmanlaw.com.

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