High Net Worth Report breaks down possible implications of TCJA for high net worth households in Nevada – Nevada Business Magazine

LAS VEGAS – The Private Bank by Nevada State Bank released the latest edition of its High Net Worth Report series today. Issue 1 of 2018 examines the major provisions of the Tax Cuts and Jobs Act (TCJA) and possible implications for high net worth households in Nevada. This issue also includes guest columnist Jeff Edwards from the accounting firm Piercy Bowler Taylor & Kern, with commentary on the charitable donation deduction and the implications of the increased standard deduction.

Highlights from the report include:

❖ Changes to the individual tax return brackets and rates should generally provide a benefit to taxpayers across all income groups; however, the legislation is expected to provide a tax benefit to a significant number of the more than 42,000 high net worth households in Nevada.

❖ The standard deduction was increased from $6,350 to $12,000 for single returns, $9,350 to $18,000 for head-of-household returns, and $12,700 to $24,000 for joint tax returns for the 2018 tax year. This change is expected to affect high net worth households more than others as 80 percent of high net worth households itemize tax returns, compared with 23 percent for all other income groups. Taxpayers who itemize will have to meet higher thresholds for total itemized deductions to realize a tax savings compared to taking a standard deduction.

❖ As a result of the legislation, the state and local tax deduction is capped at $10,000. While Nevada does not levy a state income tax, the state and local sales tax deduction and property tax deduction are common among high net worth taxpayers, with 60 percent taking the sales tax deduction and 75 percent taking the real estate tax deduction. On average, high net worth tax payers deducted $4,030 in sales tax and $8,100 in real estate tax, suggesting many households could be subject to the $10,000 limit.

❖ The Tax Cuts and Jobs Act allows for a 20 percent deduction on qualified income for pass-through business entities, which make up about 90 percent of companies in the U.S. The phaseout limits for this deduction are $157,500 for single filers and $315,000 for joint filers. In Nevada, 25 percent of high net worth taxpayers reported income from sole proprietorships for an average of $73,300 in income, while 44 percent of high net worth households reported income from partnerships or S-corporations for an average of $309,900. The congressional Joint Committee on Taxation estimates that high net worth households in the U.S. will receive three-quarters of the income deduction benefit from the pass-through deduction.

“The Tax Cuts and Jobs Act is expected to welcome beneficial tax relief to many of Nevada’s high net worth households,” Senior Vice President/Private Banking Manager James Rensvold said. “While the new deduction limits and rules may require more thought and attention next year at tax time, the tax savings will provide an economic boost for Nevada.”

The Private Bank publishes the High Net Worth Report quarterly. Briefings will be made available on Nevada State Bank’s website at www.nsbank.com/HNWreport or by contacting The Private Bank directly at 702.855.4596.

About The Private Bank by Nevada State Bank (@NSBPrivateBank)
The Private Bank by Nevada State Bank provides a full range of personalized financial services for high net worth and high-income clients. www.nsbank.com/private

About Nevada State Bank (@nevadastatebank)
Nevada State Bank, a division of ZB, N.A., is a full service bank offering a complete range of consumer, private and business banking services with branches statewide. Founded in 1959, Nevada State Bank serves 20 communities across the state of Nevada. ZB, N.A.’s parent company is Zions Bancorporation, which is included in the S&P 500 and NASDAQ Financial 100 indices (NASDAQ: ZION). For more information on Nevada State Bank, call 702.383.0009 or access www.nsbank.com.


Go to Source

Powered by WPeMatico