Our nyc cpa and accounting firm is constantly reviewing  tax law to ensure our nyc freelance and self-employed business owner clients are in compliance. The new tax reform bill that the House passed on November 16 approved moves the GOP one-step closer to achieving a signature legislative victory. The Senate is now in the process of preparing its own tax reform package which, if passed, would need to be reconciled with the House before final legislation can be sent to the White House.

The House-passed bill would reduce the current seven individual tax rates to four with a top rate of 39.6 percent, repeal the Alternative Minimum Tax (AMT), eliminate the medical expense deduction as well as many other individual and business tax preferences, reduce the top corporate tax rate and rate on pass-through business income, and make significant changes to the tax rules governing international operations. Highlights of the proposed tax reform bill include:

  • Reduce individual tax rates to a four-tiered structure (12, 25, 35 and 39.6 percent), aligned with revised bracket amounts;
  • Nearly double the standard deduction;
  • Repeal the deduction for personal exemptions;
  • Lower by half the mortgage interest deduction cap;
  • Limit state and local tax itemized deductions to $10,000 property taxes;
  • Eliminate the medical expense deduction;
  • Eliminate the alimony deduction;
  • Eliminate the deduction for tax preparation expenses;
  • Consolidate many education incentives;
  • Increase and modify the child tax credit;
  • Create a new, temporary family tax credit;
  • Preserve the child and dependent care credit;
  • Preserve the adoption credit;
  • Preserve treatment of non-qualified deferred compensation;
  • Double the estate gift tax exclusion and lower the rate, with estate tax repeal delayed until 2024;
  • Lower the top corporate tax rate from 35 percent to 20 percent;
  • Create a new pass-through tax regime;
  • Provide 100-percent bonus depreciation for five years;
  • Revise the rules for deducting business interest;
  • Repeal like-kind exchanges except for real property;
  • Repeal the individual and corporate AMT;
  • Eliminate the Work Opportunity Tax Credit and many other business tax preferences;
  • Include a global minimum tax and other international reforms; and
  • Make many other changes to the tax code.

If you have questions about the latest tax reform and your freelance business or tax reform’s impact on the self-employed, please contact our nyc cpa and nyc accountants in Manhattan.