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The Federal Tax Laws have recently been significantly reshaped and the changes affect us all. Much press has been devoted to discussing changes to the Standard Deduction, State/Local Income Tax Deduction, and Mortgage Interest Deduction. We offer below a few broad brush observations on lesser addressed aspects of the tax legislation that impact Individuals:

  •  Portfolio investing is not impacted much. Dividends and Capital Gains still receive favorable tax treatment. The Net Investment Income “surtax” is unchanged. Retirement saving incentives were not proscribed - except ROTH IRA Conversions can no longer be recharacterized before year end. Permitted uses for 529 Plan funds are expanded to cover pre-college years.
  • Almost all the changes impacting individuals “sunset” after seven years. Many of today’s politicians will not be around to deal with the consequences in seven years when most changes affecting Individuals revert to last year’s tax law.
  • The reach of the dreaded Alternative Minimum Tax (AMT) is shortened. Significantly fewer individuals are expected to payAMT. While AMT was repealed outright for Corporations, for Individuals many AMT disallowed deductions are now not deductible for Regular Tax purposes (or the deduction is limited) while the AMT exemption is both increased and indexed for inflation.
  • Alimony changes in 2019. Next year, Alimony will no longer be deductible by the payor or taxed as income to the recipient.
  • The Estate Tax Exemption has doubled. Estates below $11.2 million ($22.4 million for couples) no longer trigger any Federal Estate Taxes (until this change also “sunsets” in 2025!) but State Estate Taxes can still take a noticeable tax bite.


Please remember past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. No assumptions can be made that the future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by Boston Research & Management, Inc.), or any noninvestment related content, made reference to directly or indirectly in this newsletter will be suitable for your portfolio or individual situation, achieve any particular investment result, or be profitable or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as, or as a substitute for, personalized investment advice from us. Readers, to the extent you have questions regarding the applicability of any specific issue discussed above to the your situation, you are encouraged to consult with the professional advisor of your choosing. Clients, please remember to advise us, in writing, about any changes in your personal or financial situation, or a decision to change your Investment Objective, or a desire to impose, add, or modify any reasonable restrictions to our full discretion over investments. We are neither a law firm nor accounting firm and no portion of the newsletter content should be construed as legal or tax advice. A copy of our current Disclosure Statement discussing our advisory services and fees is available upon request.