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Tax Laws

How Will Tax Reform Impact Seniors and Persons with Disabilities?

By Hello Local Support TeamDecember 4, 2018December 4, 2018 No comments yet

The Tax Cut and Jobs Act (TCJA) became law in 2018.  It is the first overhaul of the tax code in more than 30 years.  In this article, we will mostly look at how this tax law is likely to impact seniors and persons with disabilities.

Generally, retirees will be less affected than others because the changes do not affect how Social Security and investment income are taxed. In fact, many will benefit from the doubling of the standard deduction and, with the new individual tax brackets and rates, will be paying less in taxes when they file their tax returns in April, 2019.

Here are just a few key provisions in the tax law that could affect retirees and persons with disabilities. These provisions are set to expire at the end of 2025 unless Congress acts before then to keep in place.

There are still seven individual tax brackets and rates, but most are lower. Current rates are 10%, 15%, 25%, 28%, 33%, 35% and 39.6%. Here are the new rates and how much income will apply to each:

 

Rate         Individuals Married, filing jointly
10% Up to $9,525 Up to $19,050
12% $9,526 to $38,700 $19,051 to $77,400
22% $38,701 to $82,500 $77,401 to $165,000
24% $82,501 to $157,500 $165,001 to $315,000
32% $157,501 to $200,000 $315,001 to $400,000
35% $200,001 to $500,000       $400,001 to $600,000
37% $500,001 and over $600,001 and over

For single filers, the standard deduction is increased from $6,350 to $12,000. For married couples filing jointly, it increases from $12,700 to $24,000. Under the new law, fewer filers would choose to itemize because the standard deduction is so high.

Currently, you can claim a $4,050 personal exemption for yourself, your spouse and each dependent.  The new law eliminates these personal exemptions, replacing them with the increased standard deduction.

However, the blind and elderly deduction has been retained in the new law. People age 65 and over (or blind) can claim an additional $1,550 deduction if they file as single or head-of-household. Married couples filing jointly can claim $1,250 if one meets the requirement and $2,500 if both do.

Currently, people with high medical expenses can deduct the portion of those expenses that exceeds 10% of their income. For example, a couple with $50,000 in income and $10,000 in medical expenses can deduct $5,000 of those medical expenses.  The new law increases this to medical expenses that exceed 7.5% of income. In the example above, the couple would be able to deduct $6,250 of their expenses.

The new law changes the amount you can deduct for payments of state and local property taxes, income and sales taxes from an unlimited amount to a limit of $10,000.

The new law changes the mortgage interest deduction from a debt cap amount of $1 million to  $750,000. If your mortgage is already existing, you would not be affected. The deduction for interest on home equity loans was also eliminated.

Under the new law, parents will be able to take a $500 credit for each non-child dependent they are supporting. This would include a child age 17 or older, an ailing elderly parent or an adult child with a disability.

The new law does not repeal the Federal estate tax, but it eliminates it for almost everyone by doubling the estate tax exemption to $11.2 million for individuals and $22.4 million for married couples. Amounts over these exemptions will be taxed at 40%.

The individual mandate to purchase health insurance is eliminated.  Critics, including AARP, claim that eliminating the individual mandate will drive up health care premiums, result in more uninsured Americans and add $1.46 trillion to the deficit over the next ten years, which could trigger automatic spending cuts to Medicare, Medicaid, and other entitlement programs unless Congress votes to stop them.

ABLE accounts were previously established to allow some individuals with disabilities to retain higher amounts of savings without losing their Social Security and/or Medicaid benefits. The new tax law allows money in a 529 education plan to be rolled over to a 529A ABLE account.   

Please don’t hesitate to reach out if you have questions about these new provisions and how they may impact you or those you work with.  This article does not include all changes made and we recommend consulting the Act itself and/or a CPA with questions you have when filing your tax return.  

Article Credit:  Elder Counselor Newsletter, Volume 9, Issue 1, January 2018

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Bullard & Mulkey, P.A.
Bullard & Mulkey, P.A.
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Cynthia Merkey
Cynthia Merkey
19:56 13 Aug 18
Very nice people. They answer your legal questions thoroughly and take care of business. The location is in an historic home now converted which is characteristic of many houses in this area.
Jayne Carroll
Jayne Carroll
22:16 31 Mar 18
I highly recommend Bullard and Mulkey. Bernhard Stalzer is amazing! He has helped me step by step to get a dear friend qualified for Medicaid. He knows his stuff and goes the extra mile. Do not hesitate to use this firm!!
Debra Jenkins
Debra Jenkins
10:56 27 Oct 17
Shannon and her staff were professional and prepared when I arrived. She answered all my questions and guided me through the decision making process to ensure my wishes were exactly what I wanted. I highly recommend Shannon Mulkey for your family's planning needs.
darla priest
darla priest
12:56 25 Oct 17
The moment I walked into Shannons office,she made me feel like I had known her for years.Shannon is caring, professional but most of all an expert in her field of law. I will continue to refer my friends,family and business associates to Shannon Mulkey.Shannon, you are a Gem!!
Deryk Shepherd
Deryk Shepherd
11:58 25 Oct 17
Shannon provides a level of interest and care that enables her to smoothly handle all of the details associated with your case smoothly.
Josh Hill
Josh Hill
18:04 25 Aug 17
Shannon is the example of integrity. The attention to detail was impeccable, and went above and beyond for my best friend. She treats everyone as if they were family.
stephanie Gonzalez
stephanie Gonzalez
17:08 17 Aug 17
Shannon THANK YOU so much for all you have done! Was in a terrible situation and you've helped us so much in such a stressful time.. you rock! So knowledgeable professional.. HIGHLY RECOMMEND !
Sarah James
Sarah James
21:10 16 Aug 17
Shannon was so very helpful in setting up all the needed documents for my growing family. We were able to get everything in line before we delivered our daughter and feel confident that given an unfortunate situation, we are completely prepared. I highly refer them!
Scott Kiefer
Scott Kiefer
18:14 16 Aug 17
I have referred several clients to Shannon Mulkey. She is a very knowledgeable attorney and a compassionate person. I highly recommend Shannon and her firm.
Carlo Knight
Carlo Knight
08:53 16 Aug 17
I must admit I haven't used Bullard & Mulkey services but I know Shannon personally, and she is one of the most dedicated and compassionate people I know as a person and in her profession. I highly recommend using Bullard & Mulkey. I've also heard good things about her from others who have used her services.
Mike O'Connor
Mike O'Connor
21:01 11 Aug 17
I have several active guardianship cases in which Shannon Mulkey represents me. Shannon and her staff are consummate professionals; correct, efficient and prompt. In the courtroom Shannon is astute and always well prepared. I highly recommend her.
Lona Hale
Lona Hale
12:47 08 Aug 17
As a professional Guardian for 15 plus years, I have worked with Shannon and other attorneys for many years. I find Shannon to be among the best. She provides quality service with attention to details. I recommend Shannon and the Bullard & Mulkey Law firm without hesitation!
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ABOUT BULLARD & MULKEY, P.A.

Bullard & Mulkey, P.A. is a two attorney firm with one office in Ocala, Florida right on SE 8th Street. We take pride in offering personal legal services in a comfortable setting.

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Address: 310 SE 8th St, Ocala, FL 34471
Phone: (352) 732-5900

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4.6
Bullard & Mulkey, P.A.
Bullard & Mulkey, P.A.
4.6
Kelly French
Kelly French
22:37 18 Apr 17
Lona Hale
Lona Hale
12:47 08 Aug 17
As a professional Guardian for 15 plus years, I have worked with Shannon and other attorneys for many years. I find Shannon to be among the best. She provides quality service with attention to details. I recommend Shannon and the Bullard & Mulkey Law firm without hesitation!
Mike O'Connor
Mike O'Connor
21:01 11 Aug 17
I have several active guardianship cases in which Shannon Mulkey represents me. Shannon and her staff are consummate professionals; correct, efficient and prompt. In the courtroom Shannon is astute and always well prepared. I highly recommend her.
Carlo Knight
Carlo Knight
08:53 16 Aug 17
I must admit I haven't used Bullard & Mulkey services but I know Shannon personally, and she is one of the most dedicated and compassionate people I know as a person and in her profession. I highly recommend using Bullard & Mulkey. I've also heard good things about her from others who have used her services.
Scott Kiefer
Scott Kiefer
18:14 16 Aug 17
I have referred several clients to Shannon Mulkey. She is a very knowledgeable attorney and a compassionate person. I highly recommend Shannon and her firm.
Sarah James
Sarah James
21:10 16 Aug 17
Shannon was so very helpful in setting up all the needed documents for my growing family. We were able to get everything in line before we delivered our daughter and feel confident that given an unfortunate situation, we are completely prepared. I highly refer them!
stephanie Gonzalez
stephanie Gonzalez
17:08 17 Aug 17
Shannon THANK YOU so much for all you have done! Was in a terrible situation and you've helped us so much in such a stressful time.. you rock! So knowledgeable professional.. HIGHLY RECOMMEND !
Josh Hill
Josh Hill
18:04 25 Aug 17
Shannon is the example of integrity. The attention to detail was impeccable, and went above and beyond for my best friend. She treats everyone as if they were family.
darla priest
darla priest
12:56 25 Oct 17
The moment I walked into Shannons office,she made me feel like I had known her for years.Shannon is caring, professional but most of all an expert in her field of law. I will continue to refer my friends,family and business associates to Shannon Mulkey. Shannon, you are a Gem!!
Debra Jenkins
Debra Jenkins
10:56 27 Oct 17
Shannon and her staff were professional and prepared when I arrived. She answered all my questions and guided me through the decision making process to ensure my wishes were exactly what I wanted. I highly recommend Shannon Mulkey for your family's planning needs.
Jayne Carroll
Jayne Carroll
22:16 31 Mar 18
I highly recommend Bullard and Mulkey. Bernhard Stalzer is amazing! He has helped me step by step to get a dear friend qualified for Medicaid. He knows his stuff and goes the extra mile. Do not hesitate to use this firm!!
Cynthia Merkey
Cynthia Merkey
19:56 13 Aug 18
Very nice people. They answer your legal questions thoroughly and take care of business. The location is in an historic home now converted which is characteristic of many houses in this area.
Deryk Shepherd
Deryk Shepherd
11:58 25 Oct 17
Shannon provides a level of interest and care that enables her to smoothly handle all of the details associated with your case smoothly.
Mayara Castilho
Mayara Castilho
15:29 15 Jul 20
Had a phone a appointment with them, ended up never getting a call i had to call for the appointment once i got a hold of them he started to rush me off the phone because he had “another appointment “ coming up. Customer service is absolutely trash with this place. He was rude and a slick mouth! Worst experience ever!
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