“Navigating the Maze of Owing the IRS Back Taxes”
Settling Back Taxes for Pennies on the Dollar: An In-Depth Guide
Heavy Highway Vehicle Use Tax – Reminder!!
Sale Of Home – Real Estate Tax Tip.
An attempt to overhaul the current tax structure is currently taking place in both the House and the Senate. From a tax payers perspective, it is important to note that whatever new tax bill is agreed upon, there will be no effect on the filing of taxes for the next tax season. So I just wanted to let everone know that there is no need to panic as this bill, whatever it turns out to be, will not affect the tax fillings for the year 2017.
Standard Deductions
The House & Senate versions are almost the same. The Proposals would eliminate:
– Personal & dependent exemption deductions.
– The House version eliminates the Age and blind addons – the Senate version retains them.
Categories: Proposed Currently
1) Joint Filers $24,400 $12,700
2) Single + 1 Qualifying Child $18,300 $9,350
3) Others: $12,200 $6,350
Standard Deduction Example
Current Proposed
Single $6,350 + $4,050 (1 exemptions) $10,400 $12,000
Single + 2 $6,350 + (3 exemptions) (3x$4,050) $18,500 $12,000
MFJ $12,700 + (2 exemptions) (2x$4,050) $20,800 $24,000
MFJ + 2 $12,700 + (4 exemptions) (4x$4,050) $28,900 $24,000
MFJ + 4 $12,700 + (6 exemptions) (6x$4,050) $37,000 $24,000
Individual Tax Brackets
Proposed:
• House: 12%, 25%, 35% and 39.6%
• Senate: 10%, 12%, 22.5%, 25%, 32.5%, 35%, 38.5%
Currently:
• Seven Tax Brackets 10%, 15%, 25%, 28%, 33%, 35% & 39.6%
House Version
% S HH MFJ MFS
12% 45,000 87,500 90,000 45,000
25% 200,000 200,000 260,000 130,000
35% 500,000 500,000 1mil 500,000
39.6%
Senate Version
% S HH MFJ MFS
10 9,250 13,600 19,050 9,525
12 38,700 51,800 77,400 38,700
22.5 60,000 60,000 120,000 60,000
25 170,000 170,000 290,000 145,000
32.5 200,000 200,000 390,000 195,000
35 500,000 500,000 1Mil 500,000,
38.5
12% Bracket
A) Phased Out – House Only
B) The tax benefit of the 12% bracket is phased out at $6 for Every
$100 AGI exceeds:
1) $1 Mil for Single Individuals
2) $1.2 Mil for MFJ
Itemized Deductions
• Medical Expenses
• House – Repealed
• Senate – Retained
• Taxes
• House – $10,000 of Property Tax
• Senate – None
Home Mortgage Interest
House
Senate
Charity
Certain Miscellaneous, Repealed – House & Senate
*However, Senate Version allows Disaster Losses
Senate Version Repeals all Tier II
Child & Family Credits
Due Diligence
· Senate Version
1.) Adds HH Due Diligence
2) $500 Penalty
Kiddie Tax
• House Version
1) Changes the computation
2) Cuts connection to parent’s return
• Senate Version
1) Changes the computation
2) Cuts connection to parent’s return
3) Unearned Income taxed at Fiduciary Rates
Education – House Only
• Credits Consolidated.
1) AOTC – Only One
2) Extended To 5 Years
3) 5th Year
1) Only half credit
2) Only $500 Refundable
• Education Loans
1) Forgiven Because of Death or Disability
2) No COD Income
• Repealed Benefits
1) Above the line Deduction
2) U.S. Savings Bonds Interest
3) Employer Provided Education Assistance
Alimony • House Only
1) For Decrees After 2017
2) Not Deductible To Payer
3) Not Income To Recipient
Moving Expense • House & Senate
1) Repealed
2) Employer Reimbursement Taxable
Adoption Credit • House
1) Original Draft Axed Both the Credit and Tax-Free Reimbursement
2) Amended to Retain Credit
• Senate – Not Mentioned
Archer MSA – House Only
1) No Further Contributions
2) Can Rolled Into An HSA
Home Sale Exclusion – House Only
1) Phase Out – $1 or every $ AGI Exceeds
1) $500,000 MFJ
2) $250,000 Single
• Ownership/Use – House & Senate
1) 5 out of 8 Years
Employee Fringe Benefits • House Repealed
1) Achievement Awards
2) Dependent Care Assistance –2023
3) Transportation – Transit passes etc.
• Senate Repealed
1) Bicycle Commuting
Credits • House Only
1) Electric Vehicle – Repealed
2) Mtg Credit Certificates Repealed
3) Wind Energy, Geothermal & Fuel Cell Restored along with Solar Thru 2022 – Subject to The Existing Phaseouts
Capital Gains • Essentially Same For House & Senate
1) 0% Below the Old 15% Tax Bracket
2) $77.3K MFJ $51.7K HH $38.6 Others
3) 15% Below 20% Tax Bracket
4) $479K MFJ $239 MFS $425 Others
5) 20% On The Balance
AMT • Repealed – House & Senate
AMT Tax Credit House
1) 50% in 2019 thru 2021
2) Balance in 2022
User | 27/11/2017