PHOTO: CPA Craig Ballentine discusses how the Tax Cuts and Jobs Act will affect Williamson County residents during a presentation at Pinnacle Financial Partners. / Photo by Brooke Wanser
By BROOKE WANSER
The Tax Cuts and Jobs Act (TCJA) passed at the end of 2017 is the largest federal tax overhaul in three decades, and includes a new tax rate structure with seven new brackets.
“It’s the time of year where this is on people’s minds,” Craig Ballentine said.
Balentine is a partner of Patterson, Hardee & Ballentine, P.C., and gave the presentation to about two dozen people crowded into a room at Pinnacle Financial Partners in Cool Springs.
“With this big of a change, it’s probably a lot of people’s first time to really hear somebody talk about it,” he said.
Ballentine said many in Williamson County will see lower tax rates, while a large number of previous exemptions will be eliminated.
Those who are self-employed, he said, may be eligible for up to a 20 percent deduction in “pass through” income, or where an individual pays tax if they are the sole owner of the business.
Williamson County has many small businesses, and Ballentine estimated around 98 percent of those small companies would be eligible for the deduction from “pass through” income.
Because of the newly lowered corporate tax rate, down from around 35 percent to 21 percent, one attendee asked if he should change his business to a corporation.
Ballentine said he’d had several calls from clients asking the same question, which he advised against.
“I don’t know that this idea of ‘change everybody to a corporation’ makes a whole lot of sense,” he said.
For those with children under 17, the increase of the child tax credit from $1,000 to $2,000 will affect many.
And because of the number of houses being built in the county, the new rules on deducting mortgage interest may be relevant to new residents. Ballentine said mortgage interest on loans for new or second homes is only deductible up to $750,000.
“You buy one [home] in 2018 and you finance it all, you may not be able to write off all the interest,” he said.
One of the most notable changes in the tax code was the elimination of several exemptions and deductions.
Businesses, Ballentine said, will no longer be able to write off entertainment costs, like corporate suites at a Nashville Predators game, or a few rounds at TopGolf with clients.
Miscellaneous itemized deductions, for services like tax preparation costs, investment advisor fees and union fees, have been eliminated,
To see more information on how the Tax Cuts and Jobs Act will affect you or your business, visit taxfoundation.org/2018-tax-brackets.