Tax Law Updates
Here are a few changes in the law that have or could occur:
Tax Filings Under the Tax Cut and Jobs Act of 2017
The first tax filing “busy season” including changes made pursuant to the Tax Cut and Jobs Act of 2017 (TCJA), Pub.L. No. 115-97, 131 Stat. 2054, is now behind us. There were many unhappy surprises (e.g., lower refunds, people getting whacked by the $10,000 cap on combined state income and real estate taxes). However, there were far fewer people subject to the alternative minimum tax (AMT).
The Federal Returns Themselves
The IRS made significant changes to the Form 1040 forms and layout that taxpayers saw for the first time these past few months.
Far fewer people were affected by the AMT in 2018. This was the result of some changes in the AMT itself, but mostly because TCJA eliminated or severely limited the itemized deduction benefits that typically cause people to be subject to AMT.
Changes to TCJA
It is a remote possibility that there will be significant change to TCJA in 2019. However, there may well be some technical corrections or minor changes here and there. There are some discussions among Democrats in the House regarding softening or eliminating the $10,000 cap on the combined state income and real estate taxes.
Tax Laws Expiring on December 31, 2019
Some laws passed under TCJA are already set to expire at the end of this year. This includes the Work Opportunity Tax Credit and New Markets Tax Credit. Further, the medical expense deduction floor is scheduled to reset from 7.5 percent back up to 10 percent (making it more difficult to get a tax benefit from unreimbursed medical costs) and excise taxes on wine, beer, and distilled all are set to increase. Solar tax credits are also set to decrease.
For more information about tax law, see STATE AND LOCAL TAXATION — 2017 EDITION. Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.