Commonly referred to as the ” Tax Cuts and Jobs Act” (TCJA), enacted December 22, 2017, is the first major overhaul of the IRS Code since 1986. For individuals, these modifications will be for the tax years 2018- 2025. There is no sunset provision for the corporate tax changes. Some of the key changes are (1) tax rate changes; (2) suspension of the personal exemption; (3) increase in the standard deduction; (4) changes to the child tax credit; (5) and a key change- alimony will no longer be deductible for the payor nor will it be included in the payee’s income. The good news is that this major change for alimony payments is not retroactive. It will only apply to and become effective for any divorce or separation instrument executed after December 31, 2018. Please stay tuned for more specifics on the tax changes and the impact they will have on individuals and businesses.
This post was written by Thomas Taranto