With the year rapidly coming to a close soon, we are once again reaching out to share our annual Tax Planning Guide with you. The 2019/2020 Tax Planning Guide is available here www.webtaxguide.net/Bregante.
The massive changes brought to us in the Tax Cuts and Jobs Act (TCJA) will continue to effect 2019 and future tax years until 2025, and will continue to have a major impact on tax planning:
- Tax rates will stay consistent with 2018, with small increases to the taxable income brackets;
- Personal exemptions are still a thing of the past while the standard deductions have slightly increased again;
- The higher alternative minimum tax (AMT) phase out increases again, further decreasing the number of individuals subject to AMT;
- The 20% Qualified Business Income Deduction for income individuals receive from pass-through entities such as partnerships, limited liability companies and S corporations continues, with inflation adjustments to the phase out thresholds;
- State and local tax deductions are still limited to $10,000 and mortgages obtained in 2018 or later continue to be limited by a $750,000 ceiling of qualified acquisition indebtedness;
- And with the recent passing of the 2020 spending bill (12-20-19), medical expenses will continue to be limited to a 7.5% floor;
- Lastly, the IRS will be cracking down its focus on cryptocurrency by now asking questions relating to cryptocurrency ownership and trading transactions on the Form 1040 itself, so expect some inquiries from your tax preparer in the coming tax year!
As always, these significant tax law changes, coupled with ever-evolving changes in accounting rules and financial planning strategies, make it important to help clarify and simplify these issues for you, and we feel that the Tax Planning Guide is a great tool for us to help do that for you.
Feel free to share the link to the Tax Planning and Estate Planning Guides with friends and family who you think might find the information interesting or helpful. We hope these will prove to be convenient sources of information for you in the coming months. If you have any questions after reviewing the information presented, please do not hesitate to give us a call.