Tax Reform Highlights

Tax Reform Highlights

Blog about tax reform & charitable gift planningHighlights of the new tax reform law

The new tax reform law, commonly called the “Tax Cuts and Jobs Act” (TCJA), is the biggest federal tax law overhaul in 31 years, and it has both good and bad news for taxpayers.

Below are highlights of some of the most significant changes affecting individual and business taxpayers. Except where noted, these changes are effective for tax years beginning after December 31, 2017.

Individuals

  • Drops of individual income tax rates ranging from 0 to 4 percentage points (depending on the bracket) to 10%, 12%, 22%, 24%, 32%, 35% and 37% — through 2025
  • Near doubling of the standard deduction to $24,000 (married couples filing jointly), $18,000 (heads of households), and $12,000 (singles and married couples filing separately) — through 2025
  • Elimination of personal exemptions — through 2025
  • Doubling of the child tax credit to $2,000 and other modifications intended to help more taxpayers benefit from the credit — through 2025
  • Elimination of the individual mandate under the Affordable Care Act requiring taxpayers not covered by a qualifying health plan to pay a penalty — effective after December 31, 2018
  • Reduction of the adjusted gross income (AGI) threshold for the medical expense deduction to 7.5% for regular and AMT purposes — for 2017 and 2018
  • New $10,000 limit on the deduction for state and local taxes (on a combined basis for property and income taxes; $5,000 for separate filers) — through 2025
  • Reduction of the mortgage debt limit for the home mortgage interest deduction to $750,000 ($375,000 for separate filers), with certain exceptions — through 2025
  • Elimination of the deduction for interest on home equity debt — through 2025
  • Elimination of the personal casualty and theft loss deduction (with an exception for federally declared disasters) — through 2025
  • Elimination of miscellaneous itemized deductions subject to the 2% floor (such as certain investment expenses, professional fees and unreimbursed employee business expenses) — through 2025
  • Elimination of the AGI-based reduction of certain itemized deductions — through 2025
  • Elimination of the moving expense deduction (with an exception for members of the military in certain circumstances) — through 2025
  • Expansion of tax-free Section 529 plan distributions to include those used to pay qualifying elementary and secondary school expenses, up to $10,000 per student per tax year  (Tax advantages vary by state so check with your attorney or accountant.)
  • AMT exemption increase, to $109,400 for joint filers, $70,300 for singles and heads of households, and $54,700 for separate filers — through 2025
  • Doubling of the gift and estate tax exemptions, to $10 million (expected to be $11.2 million for 2018 with inflation indexing) — through 2025

Businesses

  • Replacement of graduated corporate tax rates ranging from 15% to 35% with a flat corporate rate of 21%
  • Repeal of the 20% corporate AMT
  • New 20% qualified business income deduction for owners of flow-through entities (such as partnerships, limited liability companies and S corporations) and sole proprietorships — through 2025
  • Doubling of bonus depreciation to 100% and expansion of qualified assets to include used assets — effective for assets acquired and placed in service after September 27, 2017, and before January 1, 2023
  • Doubling of the Section 179 expensing limit to $1 million and an increase of the expensing phaseout threshold to $2.5 million
  • Other enhancements to depreciation-related deductions
  • New disallowance of deductions for net interest expense in excess of 30% of the business’s adjusted taxable income (exceptions apply)
  • New limits on net operating loss (NOL) deductions
  • Elimination of the Section 199 deduction, also commonly referred to as the domestic production activities deduction or manufacturers’ deduction — effective for tax years beginning after December 31, 2017, for noncorporate taxpayers and for tax years beginning after December 31, 2018, for C corporation taxpayers
  • New rule limiting like-kind exchanges to real property that is not held primarily for sale
  • New tax credit for employer-paid family and medical leave — through 2019
  • New limitations on excessive employee compensation
  • New limitations on deductions for employee fringe benefits, such as entertainment and, in certain circumstances, meals and transportation

More to consider

Keep in mind that this is a brief overview of some of the most significant TCJA provisions. There are additional rules and limits that apply, and the law includes many additional provisions, so we also encourage you to consult with your accountant and other tax planning professionals to assess the full impact of the TCJA on your specific circumstances. And whether you are a business or estate planning client of Tuesley Hall Konopa, we will seek to keep you informed about how these and other tax law changes will affect you and your plans for the future.

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation.

Greta Roemer Lewis Life Fellow Indiana Bar Foundation

Greta Roemer Lewis Life Fellow Indiana Bar Foundation

Greta Roemer Lewis Admitted as Life Fellow of Indiana Bar Foundation

South Bend, IN, United States – Tuesday, January 03, 2017, — Tuesley Hall Konopa LLP is pleased to announce that Greta Roemer Lewis was admitted a “Life Fellow” of the Indiana Bar Foundation at the Indiana Bar Foundation’s 2016 Recognition Dinner.

Fellows are recognized for professional, public, and private careers that have demonstrated outstanding legal ability and devotion to the welfare of their community, state, and nation as well as the advancement of the legal profession.

Greta has practiced law in South Bend for over 25 years, focusing her practice in the areas of Estate Planning and Estate Administration. She is also licensed to practice in Michigan.

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About Tuesley Hall Konopa LLP

Tuesley Hall Konopa’s practice areas include business counsel, civil litigation, estate and tax planning, trust administration, elder law, and probate. With a seasoned team of knowledgeable professionals, Tuesley Hall Konopa is committed to helping its clients make smart decisions and solid plans that help achieve their unique goals. To find out more about the firm or to contact an attorney visit https://www.thklaw.com

VanderVeen Named to NAELA CAP

VanderVeen Named to NAELA CAP

VanderVeen Named to NAELA Council of Advanced Practitioners

South Bend, IN, United States — Thursday, August 18, 2016, – Certified Elder Law Attorney, Jennifer L. VanderVeen has been named to the Council of Advanced Practitioners by the National Association of Elder Law Attorneys. Members of CAP offer professional expertise to meet the needs of an older, maturing clientele and people with disabilities or special needs and their families.

A member of the Council of Advanced Practitioners is an attorney who has been nominated and selected by his or her peers — experienced Elder and Special Needs Law attorneys — to be part of the Council as a result of their commitment and contribution to their clients and the ethical, high-quality practice of Elder and Special Needs Law.

To become a member, the attorney must be a current NAELA member for a minimum of 10 consecutive years prior to nomination. In addition, a candidate must:

  • Hold an AV rating from the Martindale-Hubbell Peer Review Ratings, the highest rating for ethical standards and professional ability.
  • Be an NAELA Fellow or a Certified Elder Law Attorney (CELA), which is the only approved designation for certification by the American Bar Association, through the National Elder Law Foundation.

 Jennifer has been a member of NAELA’s Board of Directors since 2008. She is a frequent guest speaker for both national and local organizations whose goals include keeping an aging population and their caregivers informed about long-term planning for the elderly and people with special needs. To learn more about Jennifer’s legal services and background visit her web page at Web Bio. You can contact Jennifer by calling 574.232.3538 or by email jvanderveen@thklaw.com.

About Tuesley Hall Konopa LLP

Tuesley Hall Konopa’s practice areas include business counsel, civil litigation, estate, and tax planning, trust administration, elder law, and probate. With a seasoned team of knowledgeable professionals, Tuesley Hall Konopa is committed to helping its clients make smart decisions and solid plans that help achieve their unique goals.

To find out more about the firm or to contact an attorney call 574.232.3538 or visit www.thklaw.com.

The Conversation

[vc_row][vc_column][vc_column_text]The Conversation – a video that explains the importance of having conversations with our older family members about end-of-life wishes for their care.[/vc_column_text][/vc_column][/vc_row]

What Does Gay Marriage Mean for Indiana Employers?

What Does Gay Marriage Mean for Indiana Employers?

monogramIf you’ve read the news recently, you know that on October 6, the United States Supreme Court declined to hear appeals involving gay marriage bans in Indiana and several other states. This move allowed several lower court decisions to stand, including those holding that Indiana must recognize gay marriages. Within the past few weeks, county clerks across Indiana began granting marriage licenses to same-sex couples. As of mid-October 2014, at least 30 states recognize gay marriages, and the trends suggest court decisions will increase that number in the next few months. Also, we now know the United States Supreme Court is unlikely to address the issue in the next year.

You will have to look elsewhere for guidance on what that means socially, politically, religiously, or philosophically. But legally speaking, we can offer a few observations.

The main thing to understand is that the definition of  has expanded. This means Indiana employers need to be aware of how they administer their benefits. You may need to think more broadly about beneficiary designations for participants in your retirement plan. If you have a funeral leave policy that gives workers time off for the death of a parent-in-law, it may apply to more employees than in the past. The same goes for health insurance, family medical leave, family military leave, and any number of other benefits. The basic benefits and administration of them should not change much, but because many are tied to legally recognized families, you should be aware some employees might qualify for benefits that were previously unavailable to them.

Although this direct effect on employment practices may be small, the recent court activity on gay marriage is likely to have some indirect effects as well. There is no current federal or Indiana law prohibiting employment discrimination based on sexual orientation, but that does not mean employers are free to discriminate. First of all, some cities (such as the City of South Bend) have enacted ordinances making sexual orientation discrimination unlawful. Second, just as gay marriage has moved through the courts more quickly than the legislatures, the same could be true in the discrimination arena. The federal Equal Employment Opportunity Commission has stated publicly that one of its priorities is emerging and developing areas of the law, which it views as including lesbian, gay, bisexual, or transgender coverage under traditional sex discrimination laws. With increased attention on gay marriage, employers should expect related issues of employment discrimination will continue to be an emerging and developing area of the law.

It is not easy to predict what legal rules may emerge. Courts, lawmakers, and citizens are likely to grapple with gay marriage and related civil rights issues including issues of religious liberty for many future years. Until the law is more fully developed, precise rules do not exist. But in the meantime, the best practice for Indiana employers is what your handbooks probably say already: Do your best to treat all employees and job applicants equally.

Disclaimer: The THK Legal Blogs are for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon investigation of specific facts. You should consult an attorney for advice regarding your individual situation.