Returning Value Blog

Following the passage of the Tax Cuts and Jobs Act (TCJA), we have covered its expected impact to taxpayers. Now, three-quarters of the way through 2018, we’ve summarized many of the additional changes to federal tax law as a result of the TCJA and what to expect next. See below for updates on the status of tax reform as it relates to further legislation, regulations, notices and other guidance in the areas of corporate, partnership, individual, ASC 740, accounting methods and periods, international, transfer pricing, state and local, research and development, and non-profit tax matters. 

The S corporation business structure offers many advantages, including limited liability for owners and no double taxation (at least at the federal level). But not all businesses are eligible • and, with the new 21% flat income tax rate that now applies to C corporations, S corps may not be quite as attractive as they once were.

The Tax Cuts and Jobs Act (TCJA) provides a valuable new tax break to noncorporate owners of pass-through entities: a deduction for a portion of qualified business income (QBI). The deduction generally applies to income from sole proprietorships, partnerships, S corporations and, typically, limited liability companies (LLCs). It can equal as much as 20% of QBI. But once taxable income exceeds $315,000 for married couples filing jointly or $157,500 for other filers, a wage limit begins to phase in.

Employers may benefit from new tax break

The new Tax Cuts and Jobs Act (TCJA) creates a unique tax break for certain businesses. If your company pays employees while they are out of work on a family or medical leave, it may claim a brand-new tax credit for a portion of the wages, beginning in 2018.

Complicated new rules for business owners

The new Tax Cuts and Jobs Act (TCJA) creates a brand-new deduction for pass-through entities, designed to provide a balance to corporations benefiting from tax rate cuts. But the deduction is not nearly as simple as the new flat 21% rate for corporations authorized by the TCJA. Although many tax experts are still grappling with the rules, here are the basics of what we know so far.

Ways the new tax law affects federal estate taxes.

Home  sale exclusion remains intact

Although Congress threatened to reduce the benefits of the home sale exclusion, the final version of the new Tax Cuts and Jobs Act (TCJA) did not include a crackdown. As a result, if you sell your home at a huge profit and qualify under the existing rules, you can still exclude up to $250,000 of your gain—$500,000 if you’re married and file a joint return—from the sale of your home.

The “sandwich generation” accounts for a large segment of the population. These are people who find themselves caring for both their children and their parents at the same time. In some cases, this includes providing parents with financial support. As a result, estate planning — which traditionally focuses on providing for one’s children — has expanded in many cases to include aging parents as well.

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