Ajay Kumar, CPA

908-380-6876

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Highlights of Tax Reform Plan (Tax Cuts and Jobs Act)

After months of discussions and anticipation, the legislation for tax reform was finalized. Here are some of the main features of the tax reform bill:

Businesses

- 21% flat Corporate tax rate (down from current max 35%)
- 20% income deduction for Pass through entities (LLC/S-Corps, limitations apply)
- Elimination of corporate AMT
- Like-kind exchange (1031) limited to Real property only

Individuals

- 7 Income tax brackets (10%, 12%, 22%, 24%, 32%, 35% and 37%); max tax rate dropped from  
   39.6% to 37%
- (Almost) doubling the standard deductions and repealing of Personal exemptions. Standard
   deduction amount increased to $12K for individuals and $24K for Couple
- AMT (Alternative Minimum Tax) stays, but the exemption increased to $1 mm for couple and
   $0.5 mm for individuals
- Deduction for State/local Income/sales tax and property tax deduction capped to $10K
- Lower threshold (reduced to 7.5% from 10%) for medical expense deductions (for two years)
- Limits the deduction to interest paid on $750K (instead of current $1.0 million) of mortgage
   loans (Elimination of interest on Home Equity loans)
Ajay Kumar, CPA

 5 Villa Farms Cir;
Monroe Township,
New Jersey 08831, U.S.A.

Contact us

Email: akumar@saicpaservices.com, saicpaservices@gmail.com 

Office:
732-906-5656,
732-215-9600

Cell: 908-380-6876
Fax: 908-368-8638