The Joint Committee on Taxation has issued a summary of the present law federal tax system as in effect in 2018.
The introduction is as follows:
This document, prepared by the staff of the Joint Committee on Taxation (“Joint Committee staff”), provides a summary of the present-law Federal tax system as in effect for 2018.
The current Federal tax system has four main elements: (1) an income tax on individuals and corporations (which consists of both a “regular” income tax and, in the case of individuals, an alternative minimum tax); (2) payroll taxes on wages (and corresponding taxes on self- employment income) to finance certain social insurance programs; (3) estate, gift, and generation-skipping transfer taxes; and (4) excise taxes on selected goods and services. This document provides a broad overview of each of these elements.
A number of aspects of the Internal Revenue Code of 1986 (the “Code”), are subject to change over time. For example, some dollar amounts and income thresholds are indexed for inflation, including the standard deduction, tax rate brackets, and the annual gift tax exclusion. In general, the Internal Revenue Service (“IRS”) adjusts these numbers annually and publishes the inflation-adjusted amounts in effect for tax years beginning in a calendar year before the beginning of that year. However the IRS publication for 2018 (Rev. Proc. 2017-58) is out of date due to the December 2017 passage of Public Law No. 115-97, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, often referred to as the Tax Cuts and Jobs Act (“TCJA”). Where applicable, this document generally includes actual or estimated dollar amounts in effect for 2018 and notes whether dollar amounts are indexed for inflation.
In addition, a number of the provisions in the Federal tax laws have parameters that vary by statute from year to year or have been enacted on a temporary basis, including many from the TCJA. For simplicity, this document describes the Federal tax laws in effect for 2018 and generally does not include references to provisions as they may be in effect for future years or to termination dates for expiring provisions.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.