It’s time to start preparing and filing those 2017 taxes! Thankfully, you have the experts at Practical Taxes to help you along the way. Make sure to get everything in order—if you have contributions and other write-offs to account for, then make sure you have them ready and tallied. And make sure you make your appointment with Practical Taxes soon.
2018 Tax Changes
For those of you wondering about how the new tax laws will affect you, know that most of the changes taking place won’t affect you until the 2018 tax season. For most all tax payers, the 2018 tax season means a new tax bracket and a new tax rate structure. Some people will see benefits initially, others will not. One major change is a change to the child tax credit, which goes from 1,000 in 2017 to 2,000 in 2018—and this rate hike will remain the same until 2025. And there is another new credit for non-child dependents. The credit is for those dependents who are either too old for the child tax credit, or who are not children. The credit is lower than the child tax credit at only $500. Another change in the new tax code is the higher rate of standard deduction. The rates are calculated accordingly: 12,000 (single rate), 18,000 (for the head of household rate), and 24,000 (for married filing jointly). The new standard deduction will change how many people pay their taxes, because the new standard deduction may be more beneficial than itemizing deductions.
One major change is the elimination of the Health Care Penalty; it’s not in effect until 2019, but the individual mandate will eventually be eliminated. Also, small business will see a benefit coming, because there is a new deduction for qualified business income. This deduction allows self-employed small business owners to deduct 20%.
Of course, there are other important changes to the new tax system. Students and life-long learners will continue to have standard credits, and people paying student loans will still see credits. If you have any questions how the new tax laws will affect you, then speak with your experienced accountant at Practical Taxes.