Form 1120 Schedule M 3 Index 2019-2024

Hello and welcome! My name is Roger Philipp from Roger CPA Review. Today, I'd like to talk a little bit about how the tax reform Act affects exam candidates. On December 22nd, 2017, the Tax Cut and Jobs Act (TCJA) was passed in order to simplify the tax code. It made a variety of changes, including lowering the corporate tax rate to 21% (previously 35%). It also increased the standard deduction and the child tax credit. The standard deduction was previously a little over six thousand dollars, but it was doubled to twelve thousand dollars for individuals and twenty-four thousand dollars for married couples filing jointly. As a result, many couples will no longer need to itemize deductions or file a Schedule A, as they can simply use their standard deductions. The child tax credit was also doubled from one to two thousand dollars, with an increased threshold so that more Americans would qualify. This will help stimulate the economy. The TCJA also limited itemized deductions on Schedule A, and provided memory aids or mnemonics to help remember the categories: C: Charity, O: Other miscellaneous, M: Medical, I: Interest, T: Taxes (such as property taxes), and T: Theft and casualty. It made some adjustments to these deductions, such as allowing up to sixty percent of adjusted gross income (AGI) for cash donations to charity. It also limited property and state taxes to ten thousand dollars, and reduced the limit for mortgage interest from a million dollars plus a hundred thousand for a home equity line of credit to seven hundred and fifty thousand dollars of principal. Casualty and theft losses are now only deductible for losses in federal disaster areas. The TCJA also created a new 20 percent qualified business income deduction to lower tax rates for owners of certain...