It’s the holiday season! The last few weeks were spent in winter festivities, getting together with friends and family, and rushing around to the sound of holiday music.
Major Tax Changes Stem from the Tax Cut and Jobs Act
But you know what that means. At the end of the holiday season stands the new year – which means that it’s time for year-end tax planning. All too soon, tax forms for 2018 will be arriving and tax deadlines will come shortly thereafter.
Getting prepared for tax filing is important every year, of course. But it’s especially crucial this year because of major changes in the tax code. President Trump signed the Tax Cut and Jobs Act in late 2017 and will impact your 2018 taxes.
The Tax Cut and Jobs Act is one of the most significant changes to tax legislation in the past four decades. If you’re somewhat unsure of the impact of the changes, you’re not alone. Seventy-seven percent of Americans are confused by it.
Here are some of the most significant changes (but this is not an exhaustive list):
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Both individual and corporate tax rates are changing.
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Tax brackets are changing.
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The deduction for state and local taxes are now capped at $10,000.
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The medical expense deduction is changing.
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The standard deduction has nearly doubled.
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Deductions available related to mortgage interest.
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More people than ever are exempt from the estate tax.
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The alternative minimum tax for corporations no longer exists.
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The taxation method for multinational corporations is changing.
Be prepared in time for tax season
Whether the changes are positive or negative, they will affect everyone. This year, filers may consider consulting with an attorney in addition to their usual tax preparers to ensure full compliance with the new laws.
Additional Resources:
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Fottrell, Quentin. New tax law is stressing out and confusing Americans. MarketWatch. April 17, 2018. https://www.marketwatch.com/story/trumps-new-tax-law-is-stressing-out-and-confusing-americans-2018-02-27
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Horowitz, Julia. 34 things you need to know about the incoming tax law. CNN Business. December 20, 2017. https://money.cnn.com/2017/12/20/news/economy/republican-tax-reform-everything-you-need-to-know/index.html
