Return preparers must be ready for how the Tax Cuts and Jobs Act has modified many common features of individual and business returns.
By Paul Bonner
Tax practitioners have known and discussed the tax law changes for 2018 returns for more than a year since the Dec. 22, 2017, passage of the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97. But even forearmed with that knowledge, CPAs now face a daunting task putting those new and revised provisions into practice. While past years' changes have often been piecemeal and incremental, those now facing taxpayers and preparers are nothing short of seismic.
Here is a discussion of some of the most important new provisions for individuals and businesses across a broad cross section of income tax returns. Many dollar amounts of brackets, thresholds, and other benchmarks for the 2018 tax year are given in this handy Filing Season Quick Guide PDF.
The changes are extensive, the IRS is still issuing guidance, and final regulations interpreting and implementing many provisions are not likely to be issued until after 2018. While the Service has issued proposed regulations upon which taxpayers may rely in many areas, such as the new Sec. 199A qualified business income (QBI) deduction described later, those proposed regulations and many others still leave unanswered questions.