XMI would like to share some highlights of the Tax Reform Bill headed to the President’s desk. The information below was compiled by the Federal Government Affairs Team at The National Association of Professional Employer Organizations (NAPEO).
A number of the items in the summary below will go into effect January 1, 2018. These changes could affect the way your employees need to complete their Federal W-4 or state withholding for 2018. We are suggesting that our clients share this summary with their employees. Please watch for additional information as it becomes available.
Summary of the Tax Reform Bill
- Increases the standard deduction in 2018 from $6,500 to $12,000 for a single filer and from $13,000 to $24,000 for a joint filer.
- Increases the child tax credit from $1,000 (up to $1,000 refundable) per qualifying child to $2,000 (up to $1,400 refundable), and introduces a new $500 non-refundable “family” credit;
- Limits the deductibility of state and local taxes to the first $10,000 paid for property or income taxes (or sales taxes in lieu of income taxes); and,
- Sets new individual tax rates effective Janary 1, 2018 (these individual tax rates changes sunset after 2025).
Below are new individual tax rates set by the tax reform bill. The new tax rates have been reduced by 1% to 4%.
What’s In / What’s Out