Tax season is here again, and with a new tax season comes changes to tax laws and the filing process. Keeping up with the latest tax laws is important so you know what’s going on with your return. Today in the LongSchaefer blog, we’ll talk about the changes for filing your 2018 taxes.
Lower Marginal Tax Rates
This part of the tax reform is actually good news for taxpayers. Marginal tax rates are percentages owed for different income amounts for different tax brackets. With lower marginal tax rates, you won’t have to take as much out of your paycheck in order to pay what you owe. Some rates have dropped as much as 2-4%. For instance, if you filed Single in last year’s return and your taxable income was between $9,326-37,950, you would have been taxed 15% of your income. This year, that tax rate has been changed to 12% and applies to those whose taxable income was between $9,526 – $38,700. This is a lot of potential savings across the board.
Standard deductions have nearly doubled this year. A standard deduction is automatically applied to your return unless you choose to itemize. This is great news for taxpayers too, because it means you won’t owe as much, or you might get a bigger return.
Health Care Penalty
There is still a shared responsibility payment for 2018 if the taxpayer didn’t have full year health coverage or a documented exemption for coverage. This is repealed for 2019.
If you give to charity, you can claim these donations as deductions if you itemize. Typically, this deduction amount was limited to 50% of your income, but now the limit has increased to 60% of your income.
It’s not all good news though, some deductions can no longer be claimed on your tax return. These deductions include theft losses, unreimbursed employee expenses, alimony payments depending on inception, moving expenses for non-military, 2% AGI limited itemized deductions and more. Make sure to consult with your tax advisor to see what deductions you’re still eligible for.
These are just a few of the significant changes that came with the new tax reform bill. Your tax advisor can run through any others that are pertinent to your filing this year.
Choose LongSchaefer as Your Tax Advisor
You don’t have to worry about the nuances of tax filing when you hire a professional to help you. The tax advisors at LongSchaefer are more than happy to help you file for yourself or your business. We also help with tax planning so you can get a head start on next year. Contact us today for more information and to speak with a member of our team.