Since the Tax and Jobs Act was passed earlier in 2017, big changes are in the works for both individuals and businesses in their tax preparation methods. New limits to deductions have been introduced, withholding has been reformed, and even your income taxes will see changes in 2019. What do you need to know in order to prepare for this upcoming tax season?
Tax withholding has changed
Be sure to check out the tax withholding tables from the IRS, as they have been completely overhauled. If you’ve chosen a low withholding because, for example, you decided to itemize deductions this year, you could be in for a nasty surprise. The new standard deduction has practically doubled to $12,000 if you’re single. For married couples filing jointly, the standard deduction is now $24,000.
Itemized deduction overhaul
Many itemized deduction possibilities have been eliminated this year. Although the standard deduction is almost twice what it used to be, certain businesses and individuals can expect to take a loss if they planned to itemize deductions. You’ll want to talk to your accountant to see how you can offset this loss, for example by reviewing your property assessments and challenging them wherever possible. If you live in the area, look for a tax accountant in Las Vegas.
A final word of advice
If you are barely below the standard deduction, and if you’re inclined to help your community already, charity is the way to go. Bump yourself up just above that $12,000 line with a contribution to your favorite cause. If you are over the age of 70, you can get ready for your required minimum distributions from your IRA to kick in. If you don’t desperately need that money, give it to those in need and save up for yourself next year.