Unless you live in a cave, you’ve probably heard that we have a new tax bill effective for 2018. Well, that’s not entirely true – yet. The House and the Senate have passed separate bills that must be reconciled into a final bill. We expect that to happen within a few weeks.
Many “news” outlets are spreading half truths about the new legislation. Normal small business tax deductions are NOT going away. The mortgage interest and real estate tax deductions are NOT going away. It will NOT require the sacrifice of your oldest child – maybe just your least favorite in-law.
In fact, we believe the new bill will result in tax savings for most people. We will publish a longer blog post on the new tax bill when we get a final version. However, to whet your appetite, we present the following web site that does a pretty good job showing how the new tax bills might benefit or hurt you.
Here are a few caveats about this calculator. First, it does not calculate the effects of any reduction in tax rates to small businesses, such as S corporations, partnerships, and sole proprietorships. Second, if you are using it to run comparisons against your 2016 tax return, it does not include self-employment tax, which has not changed anyway.
So take a look. It takes only a few minutes to use. As always, please contact us with any questions or comments. No, we do not get royalties from this site. I wish.
Thanks for reading and Happy Holidays!
Frank Stitely, CPA, CVA