12 FABRICARE FE ATURE THE TAX CUTS AND JOBS ACT OF 2017 REPRESENTS THE MOST SWEEPING TAX LEGISLATION SINCE 1986. Included among the many provisions of this new law is the abolition of the Affordable Care Act (Obamacare) penalty, an across-the-board reduction in the corporate tax rate from 35 percent to 21 percent, a doubling of the estate tax exemption to $11.2 million per decedent ($22.4 million per married couple), an elimination of the deduction for meals and entertainment, and a substantial curtailment of the applicability of the Alternative Minimum Tax. First, let’s review some of the changes that will affect individual taxpayers: • All personal exemptions have been eliminated. • The standard deduction has been substantially increased – to $12,000 for singles, $18,000 for heads of household, and $24,000 for those married filing jointly. • Tax brackets have been changed to 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent – from 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent and 39.6 percent. • Alimony will no longer be deductible for divorce or separation agreements executed after December 31, 2018. There is no change in deductibility for those that are in effect prior to then. • Moving expenses are no longer deductible. • Deductions for state income taxes and real property taxes are limited to $10,000 in total per taxpayer (a married couple is considered one taxpayer). • All miscellaneous deductions have been eliminated, including tax prep fees, safe deposit boxes, investment fees, and unreimbursed employee business expenses. • Interest deduction on home mortgages is limited to $750,000 of principal. This is down from $1.1 million of home mortgage principal. However, loans existing on or before December 15, 2017 are grandfathered in. So, the interest on those loans will continue to be deductible, even if they exceed the new threshold. • The medical expense deduction threshold has been reduced to 7.5 percent of adjusted gross income from 10 percent. This will benefit those taxpayers who have heavy medical expenses. • Deductions for personal casualty losses have been eliminated, except in a federally declared disaster area. • Alternative Minimum Tax exemption amounts have been substantially increased to $70,300 for single taxpayers and $109,400 for married filing joint taxpayers. With severely curtailed itemized deductions under the new law, it is unlikely that many taxpayers will find themselves in AMT. How Will Tax Overhaul Impact You And Your Cleaning Business? A Look At The Highlights Of The Tax Cuts And Jobs Act Of 2017 By Richard Weisinger continued on page 13