2019 Year-End Tax Guide

THE MARCUM 2019 YEAR-END TAX GUIDE | www.marcumllp.com

THE TAX CUTS AND JOBS ACT: OBSERVATIONS AND STRATEGIES AFTER ONE TAX SEASON

INDIVIDUAL TAXATION The TCJA reduced the income tax rates applying to individuals, trusts and estates. The IRS has issued the following changes to the income tax brackets for 2019, including the new levels at which the preferential rates on long-term capital gains and qualified dividends apply. Also shown is the effective rate of tax where the section 199A (Qualified Business Income) deduction applies, discussed later in this Year-End Guide. This will take on greater significance in the discussion of entity selection. It must be noted that all of the individual tax changes expire after 2025 and revert to pre-TCJA rates.

The Tax Cuts and Jobs Act of 2017 (TCJA) made sweeping changes to individual and business income taxation, estate and gift taxation, and international taxation. In the year since enactment, the Internal Revenue Service and Treasury have provided guidance in many areas, some of which require further clarification. However, there are still many sections of the law on which they have been silent. This has created many challenges for individuals, businesses and tax professionals in addressing particular tax return issues. The key question everyone wants to discuss is who won and lost under the new law. Unfortunately there is no easy answer to this, since it depends on each particular fact and circumstance. But now that we have completed the first tax season under the new law, we can offer the following observations and strategies for individuals and businesses to consider for 2019 and beyond (based on current guidance).

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