Release of final tax bill details

[pb4uski]

Just read this re: signing. Stay tuned.

https://www.pwc.com/us/en/tax-servic...&elq_cid=40982

Quote:

White House officials have stated that President Trump wants to sign HR 1 into law before the end of this year. The actual signing could be delayed until January 2018 because the projected increases in federal budget deficits could trigger automatic cuts to various federal spending programs including Medicare under a 2010 ‘pay-as-yougo’ (PAYGO’) statute. Congress later this week may waive the PAYGO requirement for HR 1 as part of a temporary funding bill that the House and Senate are considering to avoid a partial shutdown of the federal government when a temporary funding bill expires on December 22. If the PAYGO requirement is not waived this week, President Trump could sign the legislation in January 2018 and Congress would have additional time to resolve the PAYGO issue next year before automatic spending reductions would be triggered in 2019. Even if the PAYGO requirement is not waived this week it remains possible the President will choose to sign the legislation anyway on the presumption that Congress will address the automatic spending cuts when they return in January.

[pb4uski]

And with respect to corporate deferred taxes:

Quote:

The bill proposes significant changes, as discussed below, that, upon enactment, will have pervasive financial reporting implications, both in the period of enactment and on a prospective basis. For example, US deferred taxes will need to be remeasured as a result of the reduced corporate income tax rate. For companies with foreign operations, mandatory taxation of deferred foreign income, as well as various provisions intended to prevent erosion of the US tax base, may impact measurement of deferred taxes and taxes payable in the period of enactment. Other changes, such as elimination or limitation of certain deductions, will impact both current and deferred taxes on a prospective basis. Changes in enacted tax law also will require the reassessment of realizability of deferred tax assets. Companies will need to carefully evaluate the impact that the changes will have on their existing financial statement positions, assertions, and disclosures, in order to appropriately account for changes in the period of enactment. For many companies, this assessment will be complex and will require significant effort.

[sheehs1]

Quote:

Originally Posted by jetpack Finally found a good summary of the new 199A Business deductions https://www.watsoncpagroup.com/SubS.pdf

Thanks jetpack. This affects me as well since the majority of my income is K1 income from an S corp.
After a quick run thru, whatever deduction I may receive on the pass thru income may be offset somewhat by the loss of the Domestic Production Activities Deduction...if in fact that rumor becomes true. It's not a total wash but from last years taxes, it would be a little over a 50% loss of the full 20% Pass Thru exemption.

[BLS53]

Quote:

Originally Posted by RunningBum Looks to me that they went with the Senate version and retained it. Page 537-538.

I've been trying to find this for days. Thanks.

[Travelfreek]

I called my tax assessor' office. The woman I spoke with said I could only pay the part due in April '18 now ($3600) and not the part due next December since it hadn't been billed yet. I'm in CA and our State income tax alone will be $11000 so w the $10k cap on all state/local/prop tax combined, it makes sense to get some extra relief this year. We are in the 28% marginal bracket by about 7k in 2017 so this extra prop tax paid in 2017 will help minimize the part of our income taxes at 28%.

[NomDeER]

Quote:

Originally Posted by golfnut I see the bill includes a proviso which abolishes the mandate that all citizens must have have hc insurance in 2019. The talking heads are all saying this will result in higher hc premiums going forward. Wondering what will happen to hc subsidies?

Fewer people will buy health insurance if they don't have to pay a penalty, which will probably increase premiums since it's more likely that older, sick, or at risk people will be the ones buying insurance. And, because health insurance companies still can't discriminate based on pre-existing conditions, they would have to insure someone who went years without buying insurance and then bought when they got seriously ill or developed a chronic condition. This will drive up costs for insurance companies and therefore drive up premiums. And when uninsured people end up in the hospital and can't pay the bills, those costs will be passed on to others and may increase insurance premiums.

My understanding is that the amount of subsidies is based on the cost of the silver plan. If the silver plan premium goes up, so do the subsidies. So, in theory, if you qualify for subsidies, your overall cost shouldn't change. But, if insurance companies can no longer get enough people, especially younger and healthier people, to buy insurance and if they still have to cover CSRs without reimbursement, there's a good chance that there will be many areas of the country without insurers on the exchange. So, if there are no insurers were you live, then no insurance, so no subsidies.



This all assumes that the ACA is not repealed next year.


So, I suppose the answer to your question is "it depends."

[Running_Man]

Quote:

Originally Posted by Cobra9777 I've always thought that so-called "one-shots" should not be so easily dismissed. These companies all took credits to the P&L as they accumulated these deferred tax assets. Were those credits dismissed? No. So why should the write-off?

The “credits” were “earned” when the companies nearly went bankrupt. The value of the credit is in shielding future income from all taxes. Since tax rates go down, companies are being able to keep more money. Since they have tax losses companies, to the extent of their deferred tax assets, do not gain additionally from the tax cut. But there is no financial hit to the company for the tax cut, as the amount of cash paid for taxes is exactly the same — zero. Anyone that was creating a cash flow model is showing the same cash flow for the amortization of the deferred asset as it was showing under the previous tax rates. What they are not gaining is the additional cash flow other corporations are gaining from lower taxes.

[donheff]

DC announced yesterday that they would accept prepayments for 2018 and provided a link to pay online on their website so I paid it.

[gerntz]

Quote:

Originally Posted by donheff I keep hearing news folks speculating on the advantages of waiting till the new year to sign the tax bill. But my memory from civics is that the President has 10 days to sign or the Bill is automatically passed (pocket vetoed if Congress recesses). Ten days from now is the 30th.

I wondered the same. My take is that Congress won't go into recess that long, if at all, by having some "pro forma" gaveling in/out days. Reminds me of when Obama wanted to declare that Congress was in recess to make some interim appointments & SC ruled that Congress decides when they are in recess.

[audreyh1]

I didn’t see it explicitly mentioned in the agreement - well maybe in a present law section - but the Net Investment Income Tax of 3.8% on long-term cap gains assets exceeding $250,000 of AGI for MFJ persists. This was added effective in 2013 I believe as a Medicare surtax as part of the ACA.

Kitces shows this in his long-term cap gains rates where he shows long-term cap gains rates going from 0% and 15% to 18.3% and 23.8% at the higher total income levels.

[jazz4cash]

Quote:

Originally Posted by donheff DC announced yesterday that they would accept prepayments for 2018 and provided a link to pay online on their website so I paid it.

Good for DC and Arlington County, VA that are helping citizens lower their expenses. I haven't heard anything about other counties in VA, but in MD, Prince George's and Montgomery say "no can do" and Howard says "OK". It's up to each county and seems pretty hodgepodge overall. I think some locations just don't want to modify their systems to accept the prepayment which is not unreasonable.

[someguy]

Quote:

Originally Posted by jetpack Finally found a good summary of the new 199A Business deductions https://www.watsoncpagroup.com/SubS.pdf

Thanks, jetpack! There's been so much talk about this and mentions of various terms without apparent definitions and this really helps clear it up.

[Senator]

Quote:

Originally Posted by someguy Thanks, jetpack! There's been so much talk about this and mentions of various terms without apparent definitions and this really helps clear it up.

Here is a good updated overall summary from the same place.


https://www.watsoncpagroup.com/tax-cuts-jobs-acts-2017/

https://www.watsoncpagroup.com/section-199a-deduction/

[ripper1]

I am sorry I may have missed this in all these posts but I am wondering is the stepped up basis for taxable accounts for heirs still in play? Thanks.

[audreyh1]

Quote:

Originally Posted by ripper1 I am sorry I may have missed this in all these posts but I am wondering is the stepped up basis for taxable accounts for heirs still in play? Thanks.

Stepped up basis for heirs is still in effect.

[ripper1]

Quote:

Originally Posted by audreyh1 Stepped up basis for heirs is still in effect.

Thanks, Audrey1

[USGrant1962]

The bill was signed this morning, it is now the law. They used a "pay-go waiver" to be able to sign it this year.

[ripper1]

I thought the idea was to sign in new year to avoid immediate cuts to medicare and medicaid. Am I right or wrong. Or is this avoid that per pay go.

[USGrant1962]

Quote:

Originally Posted by ripper1 I thought the idea was to sign in new year to avoid immediate cuts to medicare and medicaid. Am I right or wrong. Or is this avoid that per pay go.

That is what the pay-go waiver does.

[ripper1]

Quote:

Originally Posted by USGrant1962 That is what the pay-go waiver does.

Thanks, General