As the tax deadline looms on the horizon, many Americans are shaking off their procrastination and seeking out their favorite tax preparation software to get everything done and filed before April 17th. It’s important to file your form as accurately as possible, and in order to do that, you need to be up-to-date on any changes that Congress has enacted since the previous tax year. It falls on you as the taxpayer to be aware of these new changes. Failing to do so may result in tax evasion penalties or costly fines. JDKatz is here to serve as your team of tax attorneys in Maryland, delivering comprehensive support built on years of experience. Our versatile team is here to provide a wide range of services, ranging from estate planning to criminal litigation. If you’re in need of tax advice this season, our experts are here and ready to lend a hand.
We’re dedicated to helping our clients in every way we can. Today, we’ll briefly highlight the biggest tax changes for 2018 filing. When you are finished, be sure to contact us to see how we can help you navigate the complex field of tax law.
Change One: Higher Standard Deductions
This value is the amount you can deduct from your taxable income if you decide against itemizing your deductions. In 2018, the standard deduction amount has nearly doubled. This means that individuals will be able to use a deduction against their income that is now $12,000 as opposed to $6,350 in 2017. Married couples who file jointly now have a similar increase, jumping from $13,000 to $24,000 this year. Increasing this amount will prove beneficial for most taxpayers, as many Americans do not have enough itemized deductions to exceed this standard amount.
Since the deduction threshold has doubled, many taxpayers are planning ahead to gain the most benefits from their filing. Citizens who do not have enough deductions to itemize can claim two year’s worth of donations before the end of the tax year for success. In this scenario, you can itemize your deductions for 2018 while taking the standard amount in 2019. Our tax attorneys can help you to plan for future advantages.
Change Two: Lowered Tax Brackets
Our modern system relies on seven tax brackets to account for a wide range of incomes in this country. These brackets are all still in place, but in 2018, they’ve been reduced to put more Americans into a lower bracket. The first and most obvious result from this is more income through paychecks. Most citizens can expect less taxes on their income, but be sure to double-check your unique situation. The IRS has utilized a program that can help Americans to calculate whether or not they need to change their withholding amount. You may be required to adjust your W-4. No matter your needs, our tax lawyers are here and ready to assist.
Change Three: Limits on Local and State Tax Deductions
As a taxpayer, you can deduct a combination of local and state taxes for both your income and property. Until this year, citizens have been able to deduct an unlimited amount from their tax liability. This year, however, the cap is set at $10,000. You will also need to remember that these deductions are only valid on personal residences. Homeowners with more than one home may now need to plan for the future in order to gain the most benefit from their secondary properties. Now may be the time to turn your vacation home into a rental property, supplying you with additional income while enabling your second house to be used for business deductions.
2018 is a year that can be summarized as a new direction for tax planning, with new leadership and big changes for most taxpayers. It’s important for you as an American citizen to be up-to-date with all of the latest changes to ensure that you are avoiding costly mistakes and possible tax penalties. Failing to do so can result in serious disruptions to both your finances and your free time. Next time, we’ll highlight a few more big changes this tax season, as well as the benefits that our tax attorneys in Maryland can provide. Contact us today to learn more or to receive professional tax advice for your tax filing!