Just the Tip of the Iceberg: The New Tax Law

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I recently returned home after having my third back surgery. So, I was home recovering and catching some college basketball when news on the new tax law signed by President Trump hit my email this morning.

There is just so much to it. This will be one of the many articles that I will write regarding this law. I haven’t really gotten into all the details of it yet, or heard the talking heads respond to it. I literally downloaded the codified law and began reading.

I don’t know if you are anything like me, but when I read a tax law, I’m looking for holes — ways to follow the law, but also to take advantage of the law until they make another law, that I can then find another way around that. I’m not going to give my opinion of these changes now, but I will in subsequent articles after more research.

The first thing that you will notice is that the income tax brackets have been lowered.

5 (A) MARRIED INDIVIDUALS FILING JOINT RETURNS AND SURVIVING SPOUSES—The following table shall be applied in lieu of the table contained in subsection (a):
If taxable income is: The tax is:
Not over $19,050 ...................................... 10% of taxable income.
Over $19,050 but not over $77,400 .......... $1,905, plus 12% of the excess over $19,050.
Over $77,400 but not over $165,000 ........ $8,907, plus 22% of the excess over $77,400.
Over $165,000 but not over $315,000 ...... $28,179, plus 24% of the excess over $165,000.
Over $315,000 but not over $400,000 ...... $64,179, plus 32% of the excess over $315,000.
Over $400,000 but not over $600,000 ...... $91,379, plus 35% of the excess over $400,000.
Over $600,000 .......................................... $161,379, plus 37% of the excess over $600,000.

9 (B) HEADS OF HOUSEHOLDS —The following table shall be applied in lieu of the table 11 contained in subsection (b):
If taxable income is: Not over $13,600 ......the tax is 10% of taxable income.
Over $13,600 but not over $51,800 .......... $1,360, plus 12% of the excess over $13,600.
Over $51,800 but not over $82,500 .......... $5,944, plus 22% of the excess over $51,800.
Over $82,500 but not over $157,500 ........ $12,698, plus 24% of the excess over $82,500.
Over $157,500 but not over $200,000 ...... $30,698, plus 32% of the excess over $157,500.
Over $200,000 but not over $500,000 ...... $44,298, plus 35% of the excess over $200,000.
Over $500,000 .......................................... $149,298, plus 37% of the excess over $500,000.

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About Craig W. Smalley, EA

Craig Smalley

Craig W. Smalley, MST, EA, has been in practice for almost 23 years. He has been admitted to practice before the IRS as an enrolled agent and has a master's in taxation. He is well-versed in US tax law and US Tax Court cases. He specializes in taxation, entity structuring and restructuring, corporations, partnerships, and individual taxation, as well as representation before the IRS regarding negotiations, audits, and appeals. In his many years of practice, he has been exposed to a variety of businesses and has an excellent knowledge of most industries. He is the CEO and co-founder of CWSEAPA PLLC and Tax Crisis Center LLC; both business have locations in Florida, Delaware, and Nevada. Craig is the current Google small business accounting advisor for the Google Small Business Community. He is a contributor to AccountingWEB and Accounting Today, and has had 12 books published on various topics in taxation. His articles have also been featured in the Chicago Tribune, New York Times, Yahoo Finance, Nasdaq, and several other newspapers, periodicals, and magazines. He has been interviewed and been a featured guest on many radio shows and podcasts. Finally, he is the co-host of Tax Avoidance is Legal, which is a nationally broadcast weekly Internet radio show.

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