< Back to Blog

“Tax Cuts and Jobs Act” of 2017 (TCJA)

Written by Kelly S. Olson Pedersen, CFP®, CDFA

December 18, 2017

We have more and more information coming out about the tax bill that will likely be voted on this week. I have put together a few “Cliff Notes” on the details in the bill that will likely pertain to you.

There are a few highlights below or click on the link to get the full summary. There will be a lot of planning to do in 2018!!!

Read Kelly’s Summary Here

If you have any questions, please don’t hesitate to call or email me.

Highlights

  • New Brackets: The TCJA did not cut the number of brackets as much as they first indicated and these brackets are set to sunset in 2025. See the table in the full summary
  • Capital gains will be 0% up to $38,600 individuals/$77,200 married. After that it is 15% and jumps to 20% for $452,400 Individual/$479,000 Joint (more marriage penalties!). The 3.8% medicare surtax on those making $200,000 individual/$250,000 married will be added to the capital gains tax.
  • Standard deduction and personal exemptions MERGE. You will no longer get an exemption deduction for each person in your family. Instead, the standard deduction will be $12,000 for individual/$24,000 married
  • State income taxes AND Real Estate taxes are COMBINED and limited to $10,000. This will have a huge impact on clients that are used to deducting state income taxes AND real estate taxes.
  • Home equity indebtedness will NO LONGER be deductible. However, Home equity debt used specifically to make a substantial improvement on a house IS deductible. So it is about what you use the money for that will make it eligible or not.

Read Kelly’s Summary