Search
  • Gaiser Financial Group

Tax Reform Highlights

Updated: Jul 19, 2018

Here are some brief updates about the tax bill that was recently passed. Keep in mind that the industry is still working through the ramifications of the legislation; there will be much more in-depth information coming throughout the year.

New Income Tax Rates

  • The tax brackets for individuals have been lowered for everyone except the lowest bracket, until 2026, when they revert back to 2017 rates. (Employees will see the lowered withholding on their February 2018 paychecks.)

  • The bracket income levels will rise each year with inflation, because they are now tied to the chained consumer price index. Over time, this will move more people into higher tax brackets.

  • The corporate tax rate was lowered from 35 to 21 percent, the lowest it’s been since 1939. Per the legislation, this lowered rate never expires.

Standard Deduction

  • The standard deduction doubles from $6,350 to $12,000 for single filers and from $12,700 to $24,000 for married/joint filers; it is projected that 94 percent of taxpayers will take the standard deduction, especially since many other deductions have been lowered or removed. The standard deduction will revert back to 2017 levels in 2026.

Personal Exemptions

  • Starting in 2018, taxpayers will no longer be able to subtract $4,150 from income for each person claimed. As a result, some bigger families may pay higher taxes.

Alternative Minimum Tax

  • The alternative minimum tax is retained, and the exemption is increased from $54,300 to $70,300 for singles and from $84,500 to $109,400 for joint filers. (The alternative minimum tax is not available at $500,000 for singles and $1 million for joint filers.) The exemption reverts to 2017 levels in 2026.

Homeownership

  • Mortgage interest remains deductible for the most part, but is limited to the interest on a maximum of $750,000 (down from $1 million) on home loans going forward. Current mortgages are not affected.

  • New restrictions on property tax deductions could make homes out of reach for some. Income tax deductions for state and local taxes are now capped at $10,000 per year, and taxpayers must choose between deducting property taxes or income/sales taxes.

  • Home equity loan interest is no longer tax deductible, starting in 2018.

  • One key homeownership benefit stayed intact: If you lived in and owned a home as your primary residence for at least two of the past five years, you may avoid tax--up to $250,000 for singles and $500,000 for married couples.

Itemized Deductions

  • The deductions that remain in place for taxpayers include charitable contributions, retirement savings contributions and student loan interest. (You have to itemize and cannot take the standard deduction in 2018 in order to deduct these expenses.)

  • The deductions no longer available starting 2018 include moving expenses (except for military), fees for tax and financial advice, home equity loan interest, and alimony payments. (People receiving alimony are now able to deduct it.)

Healthcare

  • Starting in 2019, there is no mandate for having health insurance, therefore no tax penalty as instituted by the Affordable Care Act (“Obamacare”).

  • In the past, medical expenses could be deducted only if they exceeded 10 percent of adjusted gross income. The new law lowers that threshold to 7.5 percent for 2017 and 2018, allowing more health-care costs to be written off. (NOTE: People 65+ have already had the lower threshold.) These lower thresholds expire for everyone in 2019.

Estate Taxes

  • The estate tax exemption doubled to $11.2 million for singles and $22.4 million for couples. The exemption reverts back to 2017 levels in 2026.

Let’s get together and talk about tax planning. Call us at Gaiser Financial Group in Greensboro or Raleigh NC at 336-285-0829.

Sources:

“Tax reform could alter some financial tips, strategies.” Azcentral.com https://www.azcentral.com/story/money/business/consumers/2018/01/07/tax-reform-could-alter-some-financial-tips-strategies/995984001/  (accessed January 8, 2018.)

“Trump's Tax Plan and How It Affects You.” Thebalance.com. https://www.thebalance.com/trump-s-tax-plan-how-it-affects-you-4113968 (accessed January 8, 2018).

“GOP tax bill expands medical expense deduction for two years.” CNBC.com. https://www.cnbc.com/2017/12/16/gop-tax-bill-expands-medical-expense-deduction-for-two-years.html (accessed January 8, 2018).



3 views

MAIN OFFICE
445 DOLLEY MADISON RD, SUITE 208
GREENSBORO, NC 27410

RALEIGH OFFICE
410 NORTH BOYLAN AVENUE
RALEIGH, NC 27603

 

  • White LinkedIn Icon
  • White Facebook Icon

ADVICE@GAISERFINANCIAL.COM

 

OFFICE: (336) 285-0829

 

FAX: (336)-617-3566

Investment advisory services are offered through Foundations Investment Advisors, LLC, an SEC Registered Investment Adviser. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision. 

This information is designed to provide general information on the subjects covered, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Gaiser Financial Group and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.

Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Any references to protection benefits or lifetime income generally refer to fixed insurance products. They do not refer, in any way to securities or investment advisory products or services. Fixed Insurance and Annuity product guarantees are subject to the claims‐paying ability of the issuing company and are not offered by Retirement Wealth Advisors, Inc.   

Million Dollar Round Table (“MDRT”) is a membership organization. Qualifying criteria for membership includes attaining specified levels of commissions earned, premiums paid or income earned on the sale of insurance and other financial products. MDRT membership requirements include the payment of annual dues, compliance with ethical standards, and maintaining good standing with an MDRT-approved professional association. The MDRT logo and/or trademarks are property of their respective owners and no endorsement of Bryan Gaiser or Gaiser Financial Group is stated or implied. MDRT and Retirement Wealth Advisors, Inc. (RWA) are not affiliated.

Top of the Table is an additional membership organization within MDRT. In addition to MDRT membership, qualifying criteria for membership includes attaining a higher level of commissions earned, premiums paid or income earned on the sale of insurance and other financial products. In addition to fulfilling MDRT membership requirements, Top of the Table membership requirements include payment of additional dues. Top of the Table and RWA are not affiliated.

For the detailed requirements of MDRT, please visit: https://www.mdrt.org/membership/requirements/

 

Ethics.net is owned by the National Ethics Association (NEA). NEA is a membership organization. Qualifying criteria for membership includes passing a background check. NEA membership requirements include the payment of annual dues, compliance with ethical standards, and passing yearly background checks. The NEA and Ethics.net logo and/or trademarks are property of their respective owners and no endorsement of Bryan Gaiser or Gaiser Financial Group is stated or implied. The NEA and Ethics.net are not affiliated with Retirement Wealth Advisors, Inc. (RWA).
For the detailed requirements of NEA and Ethics.net, please visit: https://www.ethics.net/faq

 

The Better Business Bureau (BBB) is a membership organization governed by The Council of BBBs, Inc. Businesses in the U.S. and Canada may apply for accreditation with their local BBB and are evaluated on eight BBB Standards of Trust, which are defined as a comprehensive set of best practices for how businesses should treat the public in a fair and honest manner. Businesses must pay a fee for accreditation review and monitoring for continued compliance to BBB standards when applying for accreditation. BBB assigns ratings to accredited businesses, which range from A+ (highest) to F (lowest) and are based on a defined set of rating elements. BBB logos and/or trademarks are property of their respective owners and no endorsement of Bryan Gaiser or Gaiser Financial Group is stated or implied. BBB and Retirement Wealth Advisors, Inc. (RWA) are not affiliated.
For the detailed requirements of the Better Business Bureau, please visit: https://www.bbb.org/

 

Logos and trademarks used are the property of their respective owners and no endorsement by the owners of the producer is stated or implied.

© 2018 by Gaiser Financial Group. Proudly created with Wix.com