Tax Updates March 14 Release

tax reform update 2018

The March tax law updates, including the remaining tax laws eMoney handles, a new designated Tax Assumptions area in the Advanced Fact Finder, and an update to the previously released Alimony Deduction have begin to roll out today, March 14.

Keep reading below for more information on the tax updates released today and what’s coming later this month.

Newly Released Tax Updates

Designated Tax Assumptions

We’ve created a brand new tax-specific assumptions section in the Advanced Fact Finder. The new Tax Assumptions area, paired with the upcoming tax-related features releasing on March 20, will allow for even greater flexibility and customization when creating financial plans for your clients.

Mortgage Deduction Limit

The cap will decrease from $1,000,000 to $750,000. Mortgages in effect before December 15, 2017 are still subject to the $1,000,000 cap. The sunset date of December 31, 2025 will be applied.

Alimony Deduction Update

The Alimony Deduction has been updated to account for grandfathered agreements and the 2019 effective date.

New Tax-Related Features

The new tax-related features will provide advisors with even more control over how they apply the Tax Cuts and Jobs Act to their client’s financial plans. Learn more about the new tax-related features below, which we’re targeting to release on March 20.

Tax Framework Configuration

To demonstrate the effect of the new tax laws on a client’s financial plan, advisors will have the ability, in Advanced Plans, to toggle between the new Tax Cuts & Jobs Act and the previous 2017 tax laws.

Sunset Configuration

If advisors believe that the new tax laws will be extended past their current sunset provision dates, they will be able to toggle the Sunset Provisions on or off.

Estate Tax Exemption User-Specified Cap

Advisors will be able to set custom estate tax exemption limits. Any custom limit will not grow over time, and eMoney will use the lesser of the custom limit and actual tax law limit. This can be used if an Advisor is anticipating any future tax law changes to this rule that differ from the Tax Cuts & Jobs Act.

Targeted Late March Release

These updates require additional work, as they are new tax laws eMoney did not previously handle. We are currently targeting a late-March release for these tax rules.

Business Pass-Through Income

A 20 percent deduction of qualified business income (QBI) will be added. The deduction will be limited when QBI is generated by a professional services business. In this case, the deduction is phased out for owners above a certain adjusted gross income (AGI) namely $157,500 for single filers and $315,000 for joint. The sunset date of December 31, 2025 will be applied.

Child Tax Credit

The per child tax credit will increase from $1,000 to $2,000, and the credit amount will be reduced for AGIs above the threshold. Thresholds are changing from $75,000 to $200,000 for single filers and from $110,000 to $400,000 for joint filers. The sunset date of December 31, 2025 will be applied.

Stay tuned for more details as we approach the next Tax Cut and Jobs Act release. Questions? Call us at 888-362-8482 or send us an email.

Joseph Pearson

Written By

Joseph Pearson is a Client Communications Supervisor with eMoney Advisor, LLC. A three-time eMoney Wingbowl Champion, one-time Chili Cook-off Runner-up and Gold Stevie® Award-winning Front-Line Customer Service Professional of the year for 2016 - Joe is a proud father, devoted husband, and he always tries turning it off and back on again before calling IT.