The new tax reform bill passed and modified in 2018 has increased the complexity of tax preparation with numerous changes. Finding your way through might be a bit like untangling spaghetti noodles in an Italian dish. Among the items that have changed are many of the deductions that are allowed. Some of the rules will create tax advantages; others may increase your tax liabilities when you file next year.
One of the most notable changes is alterations of the tax brackets and rates. The standard deduction is now $12,000 for an individual or a married person filing individually, $18,000 for a head of household and $24,000 for married couples filing jointly.
Another change affects Child Tax Credit. You will be allowed $2,000 per qualifying child refundable up to $1,400.
The unless your medical and dental expenses are 7.5% or greater than Adjusted Gross Income(AGI) you will not be able to take this deduction. AGI is your total income minus allowable deductions.
Other deductions that have been changed are:
- Home Mortgage Interest
- State and Local Tax deductions
- Charitable donations.
- Casualty and Theft Losses
- Job Expenses and Miscellaneous Deductions
Some of the allowable deductions have very specific requirements and you must understand the tax code for these before using them.
Now more than ever is the time to be sure you have a qualified CPA to work on your taxes and with all the changes, you need to begin planning today. Set up a meeting with your tax advisor so that you are ready when you file your next tax return.
If your time and money are important to you, have a CPA like Les Merritt prepare your taxes. You can avoid the frustration and lost hours and feel confident that your returns are done correctly, especially in light of the new spaghetti regulations. Get smart and contact Les Merritt at (919) 269-8553 to set up an appointment take advantage of the new tax code.