The top tax rate for C Corporations has been reduced from 35% to 21%. In order to place individual business owners and passthrough business owners in a similar tax rate situation, the Tax Cuts and Jobs Act 2018 (TCJA) added a 20% qualified business income deduction. For service businesses, such as consulting, accounting, financial services, health, and law, the deduction is limited for taxable income over $315,000 for joint filers (or $157,500 for single filers and trusts) and completely phased out for taxable income over $415,000 for joint filers (or $207,500 for single filers and trusts).

One of the most notable changes with the Tax Cuts and Jobs Act 2018 (TCJA) is that the standard deduction has increased to $24,000 for joint filers (and $12,000 for single filers), meaning that the total amount of your itemized deductions must be greater than $24,000 to get a tax benefit. However, you may still be able to benefit from your itemized deductions by applying a bunching strategy to charitable contributions and medical expenses, even though certain itemized deductions have been limited or eliminated for 2018.