Are you prepared for these tax law changes?
In 2017, Congress passed the most sweeping tax reforms in decades. New laws were introduced and many old ones were changed. These changes affect people of every tax bracket and in all walks of life. Here are just a few of the changes that you ought to be aware of.
Donations to charity
Giving to charity has long been a way to save money on your taxes. The new tax changes increase the standard deduction you can get from charitable giving considerably. However, they also put limits on some other charitable deductions, so you need to be aware of which deductions you are getting from your donations.
The reform removes deductions for theft or casualty losses. However, there is a provision in place that allows people living in areas recognized federally as disaster areas to still deduct their losses. Another provision allows those who suffered losses to claim them on their taxes for the year they occurred or the year before.
Moving expenses have long been at least partially tax-deductible. However, the new tax changes are eliminating all of the deductions for moving for nearly all taxpayers. The only people who will still be able to deduct moving costs will be members of the Armed Forces who are on active duty.
Prior to recent tax reforms, people who got married would often find their joint income moving them into a higher bracket than they were in while filing as individuals. However, the new laws all but eliminate the marriage penalty. The only couples who will still fall into a higher joint tax bracket will be those who earn more than $400,000 jointly.
Child tax credits
Under the new tax laws, the Child Tax Credit is being doubled from $1,000 to $2,000 for qualifying children under 17 years old. The income level for parents who can claim the credit is also being increased dramatically, from $75,000 to $200,000 for a single parent and $110,000 to $400,000 for married parents filing jointly.