Essential information for tax filers

Financial
accounting-analytics-balance-209224_1544730632223.jpg

This year’s tax season is going to be a doozy for millions of Americans. That’s due to sweeping changes brought on by last year’s historic tax overhaul. The Tax Cuts and Jobs Act will have an impact on everything from deductions to tax brackets. Here are three of the biggest changes you can expect to see.

Standard Deduction Increase: The standard deduction allows taxpayers to reduce their taxable income. This year, the standard deduction is nearly double as it was in 2017. That means the IRS won’t be able to tax as much of your yearly earnings. The table below demonstrates how this year’s standard deduction compares to last year’s.

Filing Status

2017

2018

Single

$6,350

$12,000

Head of Household

$9,350

$18,000

Married Filing Jointly

$12,700

$24,000

Married Filing Separately

$6,350

$12,000

Qualifying Widow/Widower

$12,700

$24,000

Itemized Deductions: Most miscellaneous itemized deductions will be eliminated. The list of deductions going away includes: employee business expenses, tax preparation fees, investment expenses, employment related educational expenses, job search expenses, hobby losses, and safe deposit box fees.

Charitable Contributions: Deductions for donations are still in place. The adjusted gross limit on cash donations is now 60%.

New Tax Bracket Rates:  An individual’s tax bracket is based on income level and filing status and determines the rate of taxes that will be paid on each portion of income. Here are the seven federal income tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. You can find out which tax bracket you’re in by clicking here.

No More Personal Exemptions: Starting in 2019 there will be no personal exemption amounts.

Larger Child Tax Credit: Child tax credits are now $2,000 for each dependent under the age of 18.

State and Local Income Tax Caps: There is now a $10,000 limit when deducting state and local tax payments for federal income tax purposes.

Alimony: According to the IRS, alimony and separate maintenance payments are no longer deductible for any agreement made or changed after 2018.

Tax Return Due Date: Monday, April 15, 2019

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Don't Miss