How Tax Reform Will Affect You When Filing Your Tax Return

 Posted on March 22, 2019 in Taxation Law

Income Tax Day--April 15, 2019--is just around the corner. This year, your taxes may be different from years past, thanks to the tax reform passed by the U.S. government. The Tax Cuts and Jobs Act (TCJA) has changed a wide variety of tax laws, and the IRS has stated that nearly every taxpayer will be impacted. 

These are some important ways taxes have changed that should be kept in mind when filing your 2018 taxes:

• Tax rates changed. Taxes will be levied against taxpayers according to seven income tax brackets. These brackets range from 10 percent to 37 percent.
• Higher standard deduction. The standard deduction has almost doubled. For 2018, it is $12,000 for singles, $18,000 for heads of household, and $24,000 for married couples filing together. There is a higher deduction available to the blind and those who are 65 and older. This means that many people will opt to take the standard deduction instead of itemizing deductions.
• Certain deductions are limited or eliminated. One of the most common deductions that has been reduced is that for state and local tax. For 2018, the deduction is limited to $10,000 and to $5,000 for couples who are married and filing separate tax returns.
• Child Tax Credit increased and expanded. The credit tops out at $2,000 for each qualifying child age 17 years old and under. Also, the income restriction for receiving full credit has been bumped up to $400,000 for joint filers and $200,000 for other taxpayers.

tFinally, it should be noted that the deadline by which you must file your tax return along with payment of any taxes owed has not been changed. While you can file for an extension, you must do so before Tax Day. Note: As in prior years, although an extension to file may be obtained, there is no extension to pay taxes due. Failure to timely file (in April or on extension) can mean an assessment of penalties and interest. Failure to timely pay (in April) can also mean an assessment of penalties and interest.

Contact a San Jose, CA Tax Law Attorney 

It is common to have questions big and small in the month leading up to when tax returns are due. Getting professional advice is critical in order to be compliant with the law and to minimize your tax liabilities.

Our firm can help you with any issues related to your 2018 returns, and we can also advise you of your best options for your 2019 taxes. April 15 will be here quickly, so if you run into any tax issues, it is best to reach out to an informed San Jose, CA income tax lawyer as soon as possible. Call the John D. Teter Law Offices at 408-866-1810 today.

Sources:

https://www.irs.gov/newsroom/tax-time-guide-most-people-affected-by-major-tax-reform-changes-special-publication-other-online-resources-can-help