JAN. 6, 2018

Is It Time for Will Espero for Lt. Governor?

by Sheryll BONILLA, ESQ.

Now that the 2017 Tax Cuts and Job Act has passed both houses of Congress and signed on December 22, 2017 by President Trump, the following are highlights of many of the provisions that will affect individuals, families, and, companies:

For individuals and families:

  • Lowers individual taxes and sets the rates at 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
  • Significantly increases the standard deduction from $6,350 and $12,700 under current law to $12,000 and $24,000 for individuals and married couple, respectively.
  • Continues to allow people to write off the cost of state and local taxes up to $10,000.
  • Expands the Child Tax Credit from $1,000 to $2,000 for single filers and married couples. The tax credit is fully refundable up to $1,400 and begins to phase-out for families making over $400,000.
  • Preserves the mortgage interest deduction. For all homeowners with existing mortgages that were taken out to buy a home by December 15, 2017, there will be no change to the current mortgage interest deduction. For homeowners with new mortgages on a first or second home, the home mortgage interest deduction will be available up to $750,000.
  • Expands the medical expense deduction for 2018 and 2019 for medical expenses exceeding 7.5% of adjusted gross income; and rising to 10% beginning in 2020.
  • Continues and expands the deduction for charitable contributions.
  • Eliminates Obamacare’s individual mandate penalty tax.
  • Maintains the Earned Income Tax Credit.
  • Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts (IRAs).
  • Increases the exemption amount from the Alternative Minimum Tax (AMT).
  • Provides immediate relief from the Estate Tax by doubling the amount of the current exemption.

For companies of all sizes:

  • Lowers the corporate tax rate from 35% to 21% (beginning in January 1, 2018). *May offer qualified individuals a deduction up to 20% of qualified business income earned by businesses organized as S corporations, partnerships, LLCs, and sole proprietorships.
  • Allows businesses to immediately write off the full cost of new equipment.
  • Protects the ability of small businesses to write off interest on loans.
  • Retains the low-income housing tax credit.
  • Preserves the Research & Development Tax Credit.
  • Retains the tax-preferred status of private-activity bonds.
  • Eliminates the Corporate Alternative Minimum Tax.
  • Modernizes our international tax system.
  • Makes it easier for American businesses to bring home foreign earnings.

Source: Bank of Hawaii

This article is for general and educational purposes only. Consult your tax professional for further details.

© 2008-2018 Hawaii Filipino Chronicle Inc.