This webinar will provide you with all of the information you need to know in order to understand and implement the changes made by the Tax Cut and Jobs Act, signed into law in December of 2017. McKonly & Asbury presenters, Mark Heath – Partner, and Charlie Eisenhart – Manager, will be covering corporate tax reform including rate changes, new depreciation rules, and limitations on deductions; flow-through tax reform with a special focus on the new 199A deduction; as well as the changes affecting individuals, including new rate brackets and limits on itemized deductions.

5. Introductions
Charlie Eisenhart
Tax Manager
ceisenhart@macpas.com
Mark Heath
Partner, Tax Practice Leader
mheath@macpas.com

6. 2017 Tax Cuts and Jobs Act
C Corporations
• Tax Rates
• Financial Reporting
• Other
6

7. 2017 Tax Cuts and Jobs Act
Pass-Through Entities
• 199A Deduction
• Technical Terminations
7

8. 2017 Tax Cuts and Jobs Act
All Businesses
• Fixed Assets
• Other Changes
• State and Local Tax Update
8

9. 2017 Tax Cuts and Jobs Act
C Corporations
• Tax Rates
• 21%
• Effective Date
• DPAD
• Financial Reporting
• Deferred Taxes
• Excessive Employee Compensation
• Dividends Received Deduction
• AMT
• Net Operating Loss Carryforwards
9

10. 2017 Tax Cuts and Jobs Act
Pass-Through Entities
• 199A Deduction
• Eligible Businesses
• Calculation
• State Considerations
• Technical Terminations
10

11. 2017 Tax Cuts and Jobs Act
All Businesses
• Fixed Assets
• 179 Limitations Increased
• Bonus Depreciation
• Qualified Improvement Property
• State Conformity
11

12. 2017 Tax Cuts and Jobs Act
All Businesses
• Other Changes
• Interest Deduction Limitation
• State Considerations
• DPAD Repealed
• Meals & Entertainment
• Family & Medical Leave Credit
• Like-Kind Exchanges
• Net Operating Loss Carryforwards
12

13. 2017 Tax Cuts and Jobs Act
State and Local Tax Update
• PA NOLs
• State Tax Deduction for Individuals
• Wayfair v. South Dakota
13

14. Individual Deductions

15. Tax Rates – Single
2017 2018
10% $0 to $9,325 10% $0 to $9,525
15% $9,325 to $37,950 12% $9,525 to $38,700
25% $37,950 to $91,900 22% $38,700 to $82,500
28% $91,900 to $191,650 24% $82,500 to $157,500
33% $191,650 to $416,700 32% $157,500 to $200,000
35% $416,700 to $418,400 35% $200,000 to $500,000
39.60% Over $418,400 37% Over $500,000

16. Tax Rates – Married Filing Jointly
2017 2018
10% $0 to $18,650 10% $0 to $19,050
15% $18,650 to $75,900 12% $19,050 to $77,400
25% $75,900 to $153,100 22% $77,400 to $165,000
28% $153,100 to $233,350 24% $165,000 to $315,000
33% $233,350 to $416,700 32% $315,000 to $400,000
35% $416,700 to $470,700 35% $400,000 to $600,000
39.60% Over $470,700 37% Over $600,000

17. Standard Deductions / Personal Exemptions
2017 2018
Single $6,350 $12,000
Head of Household $9,300 $18,000
Married Filing Jointly $12,700 $24,000
Married Filing Separately $6,350 $12,000
Surviving Spouse $12,700 $24,000
Additional Deduction for Blind / Over 65 (Single and HOH) $1,550 $1,600
Additional Deduction for Blind / Over 65 (MFJ, MFJ & SS) $1,250 $1,300
Personal Exemptions (Per person) $4,050 $0

18. Itemized Deductions
• Medical Expenses
• 2018
• All Medical Expenses over 7.5% of AGI are deductible.
• 2019 and Beyond
• All Medical Expenses over 10% of AGI are deductible.
• State, Local and Real Estate Taxes
• Maximum of $10,000
• $5,000 for Married Filing Separately.
• Charitable Contributions
• Increased from 50% to 60% of AGI.

19. • Mortgage Interest
• Only allowed on $750,000 ($375,000 MFS) in indebtedness.
• Limitation was $1,000,000 ($500,000 MFS) pre TCJA.
• Only applies to loans started after December 15, 2017.
• Home Equity Loans
• Debt not used to improve home is disallowed.
• Types
• Buying a car.
• Paying off credit card debt.
• Paying off student loan interest.
• No Grandfathering provision
• Debt used to improve home is allowed up to $100,000.
Itemized Deductions (cont.)

20. • Casualty Losses
• Nondeductible unless attributable to a federally declared disaster.
• Miscellaneous Itemized Deductions
• Nondeductible
• Includes:
• Brokerage Fees
• Unreimbursed Business Expenses
• Gambling Losses
• Only to the extent of Gambling Winnings.
• Pease Limitation – Repealed
Itemized Deductions (cont.)

21. Other Individual Provisions
• Net Business Income Losses Limited
• Non Corporation Income (No C Corps)
• Limited to
• $500,000 MFJ
• $250,000 Single
• Losses will be carried forward just like NOL
• Above the Line Deductions
• Alimony Payments
• Not deductible to payer.
• Not includable income to the recipient.
• Only for agreements entered into or substantially changed after 2018.
• Moving Expenses (Repealed)
• Except for members of the military.
• Legal Fees and Court costs for Whistle-blower cases have been added.

22. Other Individual Provisions (cont.)
• Child Tax Credit
• Increased from $1,000 to $2,000.
• Phase out increased from $110,000 to $400,000 MFJ ($200,000 (MFS, HOH
and S)).
• Credit for Other Dependents or “family credit”
• $500 Credit
• Kiddie Tax
• Children under age 19 or a Full-time Student and Under the Age of 24
• Unearned Income of more than $2,100
• Will now follow trust tax rates
• 24% - $2,250
• 35% - $9,150
• 37% - $12,500

23. Questions? Contact us at…
Charlie Eisenhart
Tax Manager
ceisenhart@macpas.com
Mark Heath
Partner, Tax Practice Leader
mheath@macpas.com