ARTICLES

BREINER LAW FIRM
  • Welcome!
  • How to Get Started
    • Schedule a call with Sarah
    • Why Work With Me
    • How Much Does an Estate Plan Cost?
  • Who I am
    • How I Am Different
    • Meet the Team
    • Happy Clients
    • Locations
  • How I Can Help
    • Estate Planning
    • Guardian Guide™
    • Planning + Productivity
    • Business Planning
    • Concierge Legal Services™
    • Community Outreach
    • Will Parties
    • MN Birch Collective Packages
    • Wills for the Spiritual Mama
    • Mother-Daughter Bat Mitzvah Retreat
  • How I Work
    • 3 Levels of Planning
    • Your Family's Lawyer for Life
    • More Than Just Money
    • Planning For Your Children
  • WEBINARS
  • FREE STUFF!
    • Events
    • Name Temporary Guardians Right Now For FREE!
    • Get a FREE copy of the best-selling book Wear Clean Underwear
  • Blog
  • Shop
    • Mystical Babes in Business

​How Will the New Tax Law Affect Your Family?

2/9/2018

0 Comments

 
​How Will the New Tax Law Affect Your Family?
 
President Trump signed the new Tax Cuts and Jobs Act bill into law on December 22, 2017, and the law includes a number of historic changes to the federal tax code. However, the vast majority of the most dramatic changes are aimed at business taxation, not individual taxpayers.

That said, there are several fairly significant changes to personal income tax laws, which I’ve highlighted below. But keep in mind, unlike the new business tax laws, which are permanent, nearly everything listed here for personal taxes sunsets after 2025 and will revert to the 2017 code in 2026 unless Congress extends the changes.
 
Higher standard deduction
The standard deduction increases to $24,000 for joint filers, $12,000 for single taxpayers, and $18,000 for heads of households, all adjusted for inflation. The law also eliminates nearly all personal exemptions, however, so those with dependents won’t see quite as much savings.

Note that if you’re a 1099 wage earner, regardless of how much you earn, you pay approximately 15% of your earnings toward payroll taxes, which would otherwise be covered by your employer and taken out of your paycheck. So even though the standard deduction has increased, if you’re a 1099/ independent contractor, you may still face a big tax bill if you’re not structured properly. 

Changes to mortgage interest deduction
For existing mortgages the limit on deducting interest on up to $1 million of mortgage interest stays the same. Deductible mortgage interest for new mortgages taken on after December 15, 2017, however, is now capped at $750,000. Additionally, homeowners may no longer claim a deduction for existing and new interest on home equity loans.

Increased child tax credit
The child tax credit increases up to $2,000 per child, and the first $1,400 is refundable, meaning the credit could reduce your tax liability to zero, and you would still receive a tax refund. The cut off for the tax credit increases to $400,000 for married couples filing jointly.
 
Expanded estate tax exemption
The estate tax exemption increases to $11.2 million for individuals and $22.4 million for couples, indexed for inflation. The rate for those estates still subject to taxation remains at 40%. However, don’t let this increase lead you to believe you don’t need to handle your estate planning if your estate is less than $11 million. Estate planning is what keeps your family out of court and out of conflict; it’s not just about taxes. Very few people will be impacted by the estate tax, but everyone’s family is at risk for court and conflict.
 
Eliminated state and local income tax deductions
State and local income tax deductions are repealed. This means that you will pay your state and local income taxes from after-tax income. However, you’ll be able to deduct up to $10,000 for state and local property taxes paid. 

Changes to medical expense deduction
Under the new law, taxpayers can deduct any medical expenses that exceed 7.5% of their adjusted gross income in 2017 and 2018. But this new deduction level sunsets on Jan. 1, 2019, when it will revert back to the previous level of 10%.

Whether the Tax Cuts and Jobs act results in tax cuts for your family or an increased tax bill is greatly dependent on how you’ve structured your financial affairs. Creating a team of trusted advisors works well for business owners, 1099 contractors and W2 wage earners. Working with a team that includes a financial planner, a CPA, and an estate planning attorney can create a flow for your wealth and protections to keep it growing and minimize impact to the capital. 
0 Comments



Leave a Reply.

    Picture
    Picture

    Author

    Sarah Breiner, Personal Family Lawyer®


    Archives

    September 2020
    August 2020
    July 2020
    June 2020
    January 2020
    December 2019
    November 2019
    June 2019
    May 2019
    April 2019
    March 2019
    October 2018
    August 2018
    February 2018

    Categories

    All
    Asset Protection
    Finances
    Guardianship
    Incapacity
    Insurance
    LGBTQ
    Planning
    Tax
    Vacation

      I would love your feedback! 

    Submit

How to Get Started

How I Work
Free Stuff!
Guardian Guide™
​Community Outreach

Company

Meet Sarah
Locations
Testimonials
Meet the Team
​​Concierge Legal Services​™

Support

Contact
Pay Your Invoice ​
Request Consultation
Client Portal
© COPYRIGHT 2020.  BREINER LAW FIRM LLC. 
​  ALL RIGHTS RESERVED.
  • Welcome!
  • How to Get Started
    • Schedule a call with Sarah
    • Why Work With Me
    • How Much Does an Estate Plan Cost?
  • Who I am
    • How I Am Different
    • Meet the Team
    • Happy Clients
    • Locations
  • How I Can Help
    • Estate Planning
    • Guardian Guide™
    • Planning + Productivity
    • Business Planning
    • Concierge Legal Services™
    • Community Outreach
    • Will Parties
    • MN Birch Collective Packages
    • Wills for the Spiritual Mama
    • Mother-Daughter Bat Mitzvah Retreat
  • How I Work
    • 3 Levels of Planning
    • Your Family's Lawyer for Life
    • More Than Just Money
    • Planning For Your Children
  • WEBINARS
  • FREE STUFF!
    • Events
    • Name Temporary Guardians Right Now For FREE!
    • Get a FREE copy of the best-selling book Wear Clean Underwear
  • Blog
  • Shop
    • Mystical Babes in Business