Today TaxMama® wishes you a Happy New Year, and brings you some basics about how the Trump Tax Plan will affect this filing season.
Dear Friends and Family,
2017 ended with quite a bit of turmoil, as Congress scrambled to pass a sweeping new tax law. It’s massive, increasing the size of the U.S. Internal Revenue Code by several hundred thousand words.
Too big to handle here. Enough to fill a book – which, as it happens, I am in the process of writing. My publisher, Humanix, hopes to release it by the end of next month. So stand by.
Meanwhile, the good news is, very little in the Tax Cuts and Jobs Act (TCJA) affects your 2017 tax returns. Here are a few things that do affect 2017:
- Charitable contributions – you absolutely must have a receipt for all donations of $250 or more to any organization. You must have it in your hands before you file your tax return. In the past, in some instances, if the organization filed a report showing that you paid them, the IRS would let it slide. No longer. So chase after those receipts immediately.
- Medical expenses – You can reduce your medical expenses by only 7.5% of your adjusted gross income. Why “only?” Because this year, everyone, including seniors, were on track to reduce our medical expenses by 10% of AGI. For a tax return with an AGI of $50,000, that increases your potential medical deductions by $1,250.
- Aircraft Transportation Fees – When aircraft owners turn their aircraft over to a management company to lease out for them, they no longer have to pay the federal transportation tax when they use their own aircraft. This affects all owners’ flights made after December 22, 2017. (The IRS decided owners had to pay these fees for flights back in 2012.)
Naturally, there are a LOT of things that will affect you for 2018. Don’t worry, I will be posting articles about the changes over the next couple of weeks.
One major 2018 issue that really needs to change is the loss of the deduction for casualty and theft losses. For instance, if you have a fire in your home, or if someone steals your identity and wipes out your bank accounts, or you fall for a Ponzi scheme – none of that is deductible any longer. This is definitely one of those deductions you want to put pressure on Congress to restore. You can reach your legislatures here – http://taxmama.com/special-reports/call-to-action/ .
Incidentally, there are many provisions that have been part of the tax law in the past that expired for 2016 or 2017. Congress normally extends them. They didn’t do that in the TCJA. However, there is a Tax Extender Bill introduced by Senator Orrin Hatch. Nothing’s happening to it yet. But when passed, it will restore several expired tax breaks – including relief from cancellation of debt income on foreclosed homes (expired 12/31/16).
In the meantime, if you want to see the effect on your taxes, MarketWatch has a nifty calculator for you to play with. Just scroll down and enter your numbers. (It doesn’t look like a tool, just like part of the article.) https://www.marketwatch.com/story/the-new-trump-tax-calculator-what-do-you-owe-2017-10-26
To make comments and tell us about how the Trump Tax plan affects you, please drop into the TaxQuips Forum.
And remember, you can find answers to all kinds of questions about the Tax Cuts and Jobs Act and other tax and business issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
Please post all Comments and Replies to this post in the TaxQuips Forum.
For those interested in earlier information – drop by here – http://taxmama.invisionzone.com/topic/8527-tax-cuts-and-jobs-act/