BGH Highlights of the Tax Cuts and Jobs Act
On December 22, 2017 the President signed into law H.R. 1, officially titled ‘An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018’, but politicians and commentators are calling it the Tax Cuts and Jobs Act. The new law overhauls the Internal Revenue Code by lowering tax rates, eliminating numerous tax provisions, and creating several new provisions. Below is a brief summary of the Tax Cuts and Jobs Act.
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Prepayment of 2018 Real Estate Tax
- The IRS said Wednesday that people may be able to deduct their 2018 state and local property taxes only if they were assessed and paid during 2017.
- People can only deduct prepaid property taxes that have already been assessed by local governments.
- Prepayments of anticipated property taxes will not be deductible.
Independent Contractor or Employee?
The distinction between an independent contractor and an employee is an important one to make for both employers and workers. Employees only pay their half of payroll taxes (which is typically withheld from their paycheck by the employer) while independent contractors must pay both (employer and employee shares). If an employee is incorrectly classified as an independent contractor, the business can be held liable for employment taxes for that worker as well as any late fees or penalties.
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