Child and Dependent Care Creidt

AN ANALYSIS OF THE TAX CUTS AND JOBS ACT

January 2018

 

AN ANALYSIS OF THE TAX CUTS AND JOBS ACT

On December 22, 2017, after much, well-publicized legislative skirmishes, President Donald Trump signed into law H.R. 1, otherwise known as the “Tax Cuts and Jobs Act.”   Provisions affecting individuals are generally effective beginning December 31, 2017 and expire on December 31, 2025.  Most business-related provisions are permanent and are effective beginning December 31, 2017.

This new law is, by all accounts, the most significant revisions to the U.S. tax code since 1986, affecting almost all individual and business taxpayers.   Our firm’s general assessment of the new law will therefore be a two-part series: this first part covers changes to individual taxpayers, and the second part will cover changes to business taxpayers.

Tax Benefits of Supporting Your Parents

Did you know you could be responsible for your parents’ unpaid bills? Ever heard of Filial Responsibility Laws?  Well, these are laws obligating you to provide financial support for your indigent parents.  Yes, obligated under law.  According to the National Center for Policy Analysis, 21 states across the country (including states like Connecticut, New Jersey and Massachusetts) allow for a civil action to obtain financial support for indigent parents.   At least 12 states may impose criminal penalties on children who refuse to support their parents.  Though rarely enforced, these laws may be dusted off by states looking to save money on Medicaid bills.

Who Claims The Kids On Their Taxes, And Other Ways Divorce May Affect Your Taxes

Divorcing couples often wonder who claims the children on their taxes, and in what other ways divorce will affect their taxes. Questions may include which filing status to use after the divorce, and how payments for spousal maintenance and child support to an ex-spouse are treated for tax purposes. Also, inquiries about what happens to assets like the family residence are obviously frequently common.

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FEDERAL TAX IMPLICATIONS FOR SAME-SEX COUPLES MARRIED UNDER STATE LAWS

In June of 2013, the U.S. Supreme Court held in U.S. v.  Windsor that provisions of the Defense of Marriage Act (DOMA) were unconstitutional. Prior to this ruling, Section 3 of DOMA required that, for purposes of federal enactments, marriage be defined as the union of one man and one woman and the word spouse be defined as someone of the opposite-sex who is a husband or wife.

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