NEW TAX LAWS
Many taxpayers are wondering whether the new tax laws or changes will have effects on their returns. Absolutely! Overall, few taxpayers will be able to itemize this year as compared to previous years. Changes such as Child tax and Additional child tax credit has been increased and the income threshold at which the credit begins to phase out has also increased. Up to $500.00 of credit will be awarded to dependents who do not qualify for the child tax credit.
Personal exemptions have been eliminated and the standard deductions for various filing status have been increased. for example, previously (2017) individuals filing as single were entitled $6,350 as a standard deduction and a personal exemption was $4,050, making a total of $10, 400. This amount ($10, 400) was taken out of taxpayer's adjusted gross income to arrive at taxable income. With the New changes, Personal exemption is canceled and the standard deduction is almost doubled ($12,000). $600 worth deductible before taxable income in the new changes. With Marriage couples filing together, the benefit is huge. It is beneficial to see a tax professional who can help maximize your returns. Other deductions such as,
Deduction for personal casualty and theft losses suspended (unless incurred in federally-declared disaster area) .
Limitations to the deduction for state and local taxes Limitations to the deduction for home mortgage interest in certain cases
Eliminating most miscellaneous itemized deductions such as: Deductions for employee business expenses, Tax preparation fees, Investment expenses, including investment management fees Employment related educational expenses, Job search expenses, Hobby losses, Safe deposit box fees, Investment expenses from pass-through entities, Eliminated the limitation on itemized deductions for certain high-income taxpayers.
Like i said earlier, Few individuals will be able to itemize this tax season.
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