22 THE QUEENS COURIER • FEBRUARY 15, 2018 FOR BREAKING NEWS VISIT WWW.QNS.COM
Here’s how the tax reform plan could aff ect you
With the newly passed tax reform bill,
the Tax Cuts and Jobs Act (TCJA), now is
the time to start thinking about how this
will aff ect you so that you can plan ahead
for the outcomes you will start to feel in
your paycheck as early as February 2018.
Th is tax reform aff ects virtually everyone;
however, families, homeowners, residents
of high-tax states, the medically
uninsured and small businesses will be
especially aff ected. Most taxpayers will
experience changes that could reduce or
increase their taxes owed. If you’re not
sure how this may aff ect you, here is a
summary of possibilities.
Like most taxpayers, many families
will be aff ected by the loss of personal
and dependent exemptions of $4,050 per
person. However, families with income
under $200,000 ($400,000 for joint fi lers)
will be eligible for an increased
child tax credit of $2,000. Th ose with
income over that amount may be eligible
for a smaller credit. Th is, along with
larger standard deductions, may or may
not make up for the loss of the personal
exemption. Families with dependents
over the age of 16 may also qualify for
a new family tax credit of $500 for each
dependent who does not qualify for the
child tax credit.
Homeowners and residents
of high-tax states
Homeowners and residents of high-tax
states like California, New York and New
Jersey, who typically itemize because they
have large expenses like real estate taxes
and state and local income taxes, may not
be able to get the full tax benefi t for these
expenses, which are capped at $10,000.
Some may not fi nd it worthwhile to itemize
going forward. Itemizing deductions is
only worthwhile if all expenses exceed the
Starting in 2019, there will no longer be
a penalty for those without health insurance.
Th e penalty, which had become
more and more expensive since fi rst
implemented in 2014, will not apply to
taxpayers without insurance in 2019.
Taxpayers who did not have insurance for
all of 2017 and do not expect to be insured
in 2018 need to make sure to talk to a tax
professional, who can help you identify if
you qualify for a penalty exemption.
Some of the largest changes in the
tax reform legislation apply to businesses,
both large and small. Th ese changes
may also aff ect some rental activities.
Corporations will see their top tax rate
reduced to 21 percent from the current
top rate of 35 percent, starting in 2018.
Pass-through entities (LLCs, partnerships
and S corporations) and self-employed
individuals will be able to deduct 20 percent
of their business income, subject to
some limits (based on the type of business
and income) and phase-outs (based on
the partner’s/shareholder’s total income).
Under the current law, taxpayers can
reconvert a Roth IRA into a traditional
IRA. Th is allows taxpayers to avoid paying
high tax bills on an amount of money that
had fallen in value aft er the conversion.
Now, taxpayers will no longer be able to
reconvert a Roth IRA to a traditional IRA.
Th e bottom line is that with this new
tax legislation, you’re still going to need to
get your documents in order and fi le your
taxes, as well as decide if you’re going to
itemize and what deductions work for
your personal situation. Th is year, it’s
more important than ever to talk to a tax
professional about how this aff ects you to
ensure that your taxes are done right and
that you have a clear understanding of
how changes that take eff ect in 2018 will
impact how you fi le in 2019.
To learn more about the tax reform,
how it may aff ect you and what steps you
can begin taking to reduce what you owe
in 2018, visit www.hrblock.com or make
an appointment with a tax professional.
Attorney At Law
25-59 Steinway Street
Astoria, NY 11103
BEST PERSONAL INJURY
Call Now & End Your Tax Nightmare!
Co-Author of the
best selling book
“Breaking the Tax Code”
Salvatore P. Candela, EA, ATA, ABA
Enrolled Agent - Tax Advisor