Potential Tax Law Changes for the New Year – 2019

At the end of last year, Congress passed and President Trump signed the Tax Cuts and Jobs Act (TCJA), the biggest overhaul of the tax code in decades. Although legislation of this magnitude isn’t expected in the next session, a lame-duck Congress could still enact significant tax laws.

SALT shakers.

One of the most controversial provisions in the TCJA caps the annual deduction for state and local tax (SALT) payments at $10,000. But lawmakers from high-tax states haven’t thrown in the towel just yet. Now two Democratic representatives from New Jersey, Josh Gottheimer and Bill Pascrell, have announced they will introduce a bill to restore the full SALT deduction. According to various sources, the tax shortfall would be closed by raising the 21% flat rate on corporate income.

Sunrise, sunset.

Another proposal isn’t likely to get very far in the next Congress. Some GOP lawmakers are pushing to have certain temporary provisions in the TCJA made permanent. For instance, the tax rate cuts for individuals and the rollback of itemized deductions, among other items, are currently scheduled to “sunset” after 2025. It’s unlikely that these or any other extraordinary measures, such as tax hikes being bandied about by some, will see the light of day

Technical matters.

Yet another proposed law seems destined for a better fate. Typically, after enactment of a major law like the TCJA, Congress follows up with a technical corrections act. This type of legislation is designed to clarify language in the major law and fix any unintended results. Similarly, Congress is expected to address certain tax breaks that were allowed to expire after 2017, such as an extension for energy credits and the tax exclusion on up to $2 million of mortgage debt forgiveness.

By |2018-12-10T17:13:16+00:00December 10th, 2018|Personal Finance|0 Comments

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