The Tax Cuts and Jobs Act of 2017
Explore the key provisions of the Tax Cuts and Jobs Act of 2017, including tax bracket comparisons between 2017 and 2018, payroll impacts, and net pay increase opportunities. Learn about major business tax implications affecting ministry staff and the temporary nature of individual tax changes. Dive into detailed income ranges for different filing statuses under the tax brackets. Stay informed about one of the largest tax code overhauls since 1986.
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Presentation Transcript
Tax Cuts & Jobs Act of 2017 (TCJA) Overview Date Date Presenter s name(s) Presenter s name(s)
Quick Facts on TCJA Quick Facts on TCJA Tax Bracket Comparison: 2017 & 2018 Tax Bracket Comparison: 2017 & 2018 AGENDA Impact on Payroll Impact on Payroll Net Pay Increase Opportunities Net Pay Increase Opportunities
Quick Facts on TCJA Quick Facts on TCJA Tax Cuts & Jobs Act of 2017 (TCJA) signed into law December 22, 2017 Largest overhaul of the tax code since 1986 Individual tax implications are temporary; set to sunset after 12/31/2025
Quick Facts on TCJA Quick Facts on TCJA Major business tax implications applicable to ministry staff: Repeal of moving expense deduction Repeal of deduction for unreimbursed employee business expenses
TAX BRACKET COMPARISON: 2017 & 2018
2017 Tax Bracket Income Ranges (Taxable Income) 2017 Tax Bracket Income Ranges (Taxable Income) Married Filing Married Filing Jointly or Qualifying Jointly or Qualifying Widow( Widow(er er) ) (MFJ) (MFJ) Married Filing Married Filing Separately Separately 2017 Tax 2017 Tax Brackets Brackets Head of Household Head of Household (HOH) (HOH) Single Single 10% 10% $0 $0 $9,325 $9,325 $0 $0 $13,350 $13,350 $0 $0 $18,650 $18,650 $0 $0 $9,325 $9,325 15% 15% $9,326 $9,326 $37,950 $37,950 $13,351 $13,351 $50,800 $50,800 $18,651 $18,651 $75,900 $75,900 $ $9,326 9,326 $ $37,950 37,950 25% 25% $37,951 $37,951 $91,900 $91,900 $50,801 $50,801 $131,200 $131,200 $75,901 $75,901 $153,100 $153,100 $37,951 $37,951 $76,550 $76,550 28% 28% $91,901 $91,901 $191,650 $191,650 $131,201 $131,201 $212,500 $212,500 $153,101 $153,101 $233,350 $233,350 $76,551 $76,551 $116,675 $116,675 33% 33% $191,651 $191,651 $416,700 $416,700 $212,501 $212,501 $416,700 $416,700 $233,351 $233,351 $416,700 $416,700 $116,676 $116,676 $208,350 $208,350 35% 35% $416,701 $416,701 $418,400 $418,400 $416,701 $416,701 $444,550 $444,550 $416,701 $416,701 $470,700 $470,700 $208,351 $208,351 $235,350 $235,350 39.6% 39.6% $418,401+ $418,401+ $444,551+ $444,551+ $470,701+ $470,701+ $235,351+ $235,351+
2018 Tax Bracket Income Ranges (Taxable Income) 2018 Tax Bracket Income Ranges (Taxable Income) Married Filing Married Filing Jointly or Qualifying Jointly or Qualifying Widow( Widow(er er) ) (MFJ) (MFJ) Married Filing Married Filing Separately Separately 2018 Tax 2018 Tax Brackets Brackets Head of Household Head of Household (HOH) (HOH) Single Single 10% 10% $0 $0 $9,525 $9,525 $0 $0 $13,600 $13,600 $0 $0 $19,050 $19,050 $0 $0 $9,525 $9,525 12% 12% $9,526 $9,526 $38,700 $38,700 $13,601 $13,601 $51,800 $51,800 $19,051 $19,051 $77,400 $77,400 $9,526 $9,526 $38,700 $38,700 22% 22% $38,701 $38,701 $82,500 $82,500 $51,801 $51,801 $82,500 $82,500 $77,401 $77,401 $165,000 $165,000 $38,701 $38,701 $82,500 $82,500 24% 24% $82,501 $82,501 $157,500 $157,500 $82,501 $82,501 $157,500 $157,500 $165,001 $165,001 $315,000 $315,000 $82,501 $82,501 $157,500 $157,500 32% 32% $157,501 $157,501 $200,000 $200,000 $157,501 $157,501 $200,000 $200,000 $315,001 $315,001 $400,000 $400,000 $157,501 $157,501 $200,000 $200,000 35% 35% $200,001 $200,001 $500,000 $500,000 $200,001 $200,001 $500,000 $500,000 $400,001 $400,001 $600,000 $600,000 $200,001 $200,001 $300,000 $300,000 37% 37% $500,001+ $500,001+ $500,001+ $500,001+ $600,001+ $600,001+ $300,001+ $300,001+
Comparison of Standard Deductions, Comparison of Standard Deductions, Personal Exemptions and Child Tax Credits Personal Exemptions and Child Tax Credits 2017 Standard Deduction 2017 Standard Deduction 2018 Standard Deduction 2018 Standard Deduction $6,350 (Single) $6,350 (Single) $12,000 (Single) $12,000 (Single) $9,350 (HOH) $9,350 (HOH) $18,000 (HOH) $18,000 (HOH) $12,700 (MFJ) $12,700 (MFJ) $24,000 (MFJ) $24,000 (MFJ) 2017 Personal Exemption 2017 Personal Exemption 2018 Personal Exemption 2018 Personal Exemption $4,050 $4,050 Repealed Repealed 2017 Child 2017 Child Tax Credit Tax Credit 2018 Child 2018 Child Tax Credit Tax Credit $1,000 max $1,000 max $2,000 max $2,000 max
Savers Credit Saver s Credit Currently: Currently: Allows taxpayers to reduce tax bill by saving for retirement Widely underutilized by qualified employees Not eliminated by TCJA Going forward: Going forward: Increases income limits for 2018 Seems status as a non-refundable credit will continue May not apply if taxpayer s increased standard deduction affects the contingency of the credit
IMPACT ON PAYROLL IMPACT ON PAYROLL
Impact on Payroll Federal Tax Withholding Impact on Payroll Federal Tax Withholding EXAMPLE 1 EXAMPLE 1 Marital status Marital status Head of household (single) Head of household (single) Allowances Allowances 2 2 Pay period frequency Pay period frequency Bi Bi- -weekly weekly (26 pay periods) (26 pay periods) Taxable salary Taxable salary $43,000 $43,000 ($45,000 salary ($45,000 salary less $2,000 Sec. 125 pretax benefits) less $2,000 Sec. 125 pretax benefits) Tax Tax withheld under prior tax withheld under prior tax regulation regulation $170 per pay period $170 per pay period Tax withheld under Tax withheld under new TCJA new TCJA $136 per pay $136 per pay period period $34 $34 increase per pay period increase per pay period
Impact on Payroll Federal Tax Withholding Impact on Payroll Federal Tax Withholding EXAMPLE 2 EXAMPLE 2 Marital status Marital status Head of household (single) Head of household (single) Allowances Allowances 2 2 Pay period frequency Pay period frequency Bi Bi- -weekly weekly (26 pay periods) (26 pay periods) Taxable salary Taxable salary $63,000 $63,000 ($65,000 salary ($65,000 salary less $2,000 Sec. 125 pretax benefits) less $2,000 Sec. 125 pretax benefits) Tax Tax withheld under prior tax withheld under prior tax regulation regulation $342 per pay period $342 per pay period Tax withheld under Tax withheld under new TCJA new TCJA $275 per pay $275 per pay period period $67 $67 increase per pay period increase per pay period
Impact on Payroll Federal Tax Withholding Impact on Payroll Federal Tax Withholding EXAMPLE 3 EXAMPLE 3 Marital status Marital status Married Married Allowances Allowances 2 2 Pay period frequency Pay period frequency Bi Bi- -weekly weekly (26 pay periods) (26 pay periods) Taxable salary Taxable salary $93,000 $93,000 ($95,000 salary ($95,000 salary less $2,000 Sec. 125 pretax benefits) less $2,000 Sec. 125 pretax benefits) Tax Tax withheld under prior tax withheld under prior tax regulation regulation $405 per pay period $405 per pay period Tax withheld under Tax withheld under new TCJA new TCJA $323 per pay $323 per pay period period $82 $82 increase per pay period increase per pay period
Impact on Payroll Federal Tax Withholding Impact on Payroll Federal Tax Withholding EXAMPLE 4 EXAMPLE 4 Marital status Marital status Married Married Allowances Allowances 2 2 Pay period frequency Pay period frequency Bi Bi- -weekly weekly (26 pay periods) (26 pay periods) Taxable salary Taxable salary $113,000 $113,000 ($115,000 salary ($115,000 salary less $2,000 Sec. 125 pretax benefits) less $2,000 Sec. 125 pretax benefits) Tax Tax withheld under prior tax withheld under prior tax regulation regulation $598 per pay period $598 per pay period Tax withheld under Tax withheld under new TCJA new TCJA $476 per pay $476 per pay period period $122 $122 increase per pay period increase per pay period
NET PAY INCREASE OPPORTUNITIES NET PAY INCREASE OPPORTUNITIES
Net Pay Increase Opportunities Net Pay Increase Opportunities Pay down credit card debt Pay down credit card debt Start or grow emergency fund Start or grow emergency fund Designate increase toward your Designate increase toward your retirement savings goal of 15% retirement savings goal of 15%
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