How The 2018 Tax Cuts & Jobs Acts Bill Impacts Home Businesses

1. 2018 TAX CUTS & JOBS ACT
How It Affects You And Your Home Business

2. The Tax Cuts and Jobs Act was
signed into law on December 22,
2017.

3. The Standard
Deduction Is
Nearly DOUBLED
Married Filing Jointly $24,000 (up from $12,700)
Head of Household $18,000 (up from $9,350)
Single $12,000 (up from $6,300)
Married Filing Separately $12,000 (up from $6,300)
Additional Amount if Over Age
65 or Blind
$1,600 - Unmarried (was $1,550)
$1,300 - Each spouse (was $1,250)
❏ The increased standard
deduction allows
Taxpayers, to exclude
more of their income
from taxes.
❏ The Personal
Exemption of $4,050
was repealed or
eliminated.

4. 7 Tax Brackets and REDUCED Tax Rates
Single and Married Filing Separately Married Filing Jointly Head of Household
10% on income up to $9,525 10% on income up to $19,050 10% on income up to $13,600
12% on income above $9,525 12% on income above $19,050 12% on income above $13,600
22% on income above $38,700 22% on income above $77,400 22% on income above $51,800
24% on income above $82,500 24% on income above $165,000 24% on income above $82,500
32% on income above $157,500 32% on income above $315,000 32% on income above $157,500
35% on income above $200,000 35% on income above $400,000 35% on income above $200,000
37% on income above $500,000 37% on income above $600,000 37% on income above $500,000

5. DEPENDENT CARECHILD TAX CREDIT
DOUBLED
● Starting in 2018, the $1,000
tax credit for children under
age 17, is DOUBLED to
$2,000.
NO
CHANGE

6. STUDENT LOAN
INTEREST
NO CHANGE
❏ The new tax law
continues to allow
a deduction up to
$2,500 per year
of interest paid on
student loans.

7. MORTGAGE INTEREST
REDUCED & CAPPED
❏ The mortgage interest deduction
is capped at $750,000 and allowed
on a first or second home.
❏ Interest on home equity loans
will no longer be deductible.
❏ Interest on up to $1 million of
acquisition debt for loans prior to
Dec 15, 2017, is grandfathered.

8. STATE & LOCAL
TAXES
CAPPED
❏ Taxpayers can claim a
deduction for a
combination of state
and local income tax,
sales tax, or real
property tax, capped at
$10,000.
❏ Foreign real property
taxes are no longer
deductible.

9. ❏ Taxpayers who itemize
deductions, can include
charitable contributions.
❏ The current limitation of
50% of income is
increased to 60%.
❏ Contributions in excess of
60% of income may be
carried forward for up to 5
years.
CHARITABLE CONTRIBUTIONS
PRESERVED WITH CHANGES

10. PASS THRU ENTITIES
MAJOR TAX BREAK
❏ Many Small and Home-Based
Businesses are “pass-thru”
business entities that “pass” their
income “thru” to their owners for
income tax purposes.
❏ Pass-thru entities are now allowed
to deduct 20% of business
income.
❏ The remaining income is subject
to normal individual tax rates.
❏ Eg., if the business earns $20,000,
the 20% deduction is $4,000.
❏ The deduction is subject to wage
limits and exceptions.

11. ❏ ELIMINATED
❏ Meals & Ent.
❏ NO CHANGE
❏ Business Interest
❏ Communications
❏ Meals on the Road
❏ Travel
❏ INCREASED
❏ Car & Truck Expenses
❏ Depreciation
❏ Child Wages (Doubled)
BUSINESS EXPENSES

12. IRS FORM W-4
Is CHANGING
❏ The IRS estimates
release of a new
Form W-4 in
February or March
2018.
❏ Taxpayers are
instructed to
continue use of
the current W-4
until the new form
is available.

13. Did you know ...
Uncle Sam will pay you to run your own
home-based business, under the new
Tax Reform Bill ?

14. “It’s NOT how much money you, MAKE.
It’s how much money you KEEP that
determines your wealth!”
“Your money WILL make somebody rich,
and the question is, WHO?
Will it be YOU?”

15. Do you want to find out how
you can convert your everyday expenses
to legitimate tax deductions legally,
ethically & morally?

16. For More Info...
Contact:
Sheila Ritter
Licensed Tax Professional, NATP
701-801-3268 (pre-recorded msg)
www.TaxSavingsMadeSimple.com