BIG CHANGES WITH THE TAX CUTS AND JOBS ACT
…………………………………………………………………………………………………
The following is fully-fleshed out script for the 3 minute news segment you see above.
QUESTION: What are some of the biggest changes this year with the TAX CUTS AND JOBS ACT?
ANSWER: The New 1040 Form
One of the most significant sets of tax changes we’ve seen in years, decades even—
TO TAX BRACKETS, RATES AND REDUCTIONS—right down to the form we file our taxes with.
They’ve “streamlined” the conventional 1040.
They took the shorter forms—the 1040-EZ and 1040—and combined them into ONE NEW 1040 FORM, so everyone will be filing the same one.
…………………………………………………………………………………………………
QUESTION: HOW IS THIS YEAR’S 1040 DIFFERENT FROM LAST YEAR’S?
ANSWER: Here’s what you need to know:
- The newer, simplified 1040 form is the SIZE OF A POSTCARD
- whittled down to just 23 lines—from the 79 on last year’s form
*If you need to make adjustments to your income, you’ll want to go to the IRS website and download the new Schedules, that you can include with the 1040, FOR:
- IRA CONTRIBUTIONS
- STUDENT LOAN INTEREST
- NON-REFUNDABLE TAX CREDITS
- SELF-EMPLOYMENT TAX
- UNCOLLECTED SOCIAL SECURITY
- MEDICARE TAXES
So the 1040 looks far less intimidating at first glance, but you still have to be sure to fill out the right SCHEDULES to file correctly—and hopefully—get something back from Uncle Sam.
Link: IRS Website Schedules Page
…………………………………………………………………………………………………
QUESTION: What other HOT BUTTON issues are you seeing?
ANSWER: In general, there’s a bit of confusion over tax breaks that have been capped or eliminated. At the same time we’re seeing the introduction of new tax breaks—or the expansion of others.
…………………………………………………………………………………………………………………………………………………
QUESTION: What common DEDUCTIONS ARE NO LONGER available?
ANSWER: Yes, if you’ve filed already, have you NOTICED ANYTHING MISSING!?! What’s gone are:
- PERSONAL EXEMPTIONS
- MOVING EXPENSES
- ALIMONY
- MISCELLANEOUS DEDUCTIONS
But don’t be discouraged!
They are set to EXPIRE IN 2025, so, it’s ANYBODY’S GUESS what could happen between then and now!
The new changes made on the CORPORATE side are PERMANENT—but that’s for an entirely different show!
…………………………………………………………………………………………………………………………………………………….
QUESTION: Tell me what’s happening with THE SALT DEDUCTION?
ANSWER: Well, most people were expecting a decrease in taxes this year overall.
But what’s happening, especially for those living in high-tax states like NY, CA, NJ and CT, they’re dealing with the STATE AND LOCAL TAX (or SALT) DEDUCTION.
This also includes real estate taxes, which got capped at $10,000.
So what’s happened—even though taxes have been decreased—they are LOSING SOME OF THEIR LARGEST DEDUCTIONS.
…………………………………………………………………………………………………
QUESTION: The STANDARD DEDUCTION vs the ITEMIZED DEDUCTION. There’s been a lot of confusion here.
ANSWER: The STANDARD DEDUCTION is now double.
- $12,000 for the individual
- $24,000 for joint filers
So, people are flocking to the STANDARD DEDUCTION as a result of this.
In fact, TurboTax anticipates 90% will take the STANDARD DEDUCTION —a 70% JUMP* in what we’ve seen in previous years.
…………………………………………………………………………………………………
QUESTION: Has anything changed in the way we can claim our DEPENDENTS? ALIMONY? HOME EQUITY?
ANSWER: The DEPENDENT EXEMPTION is gone, replaced by the CHILD TAX CREDIT.
You used to be able to claim up to $4,050.
With the Child Tax Credit, you can claim up to $2,000 (doubled from last year).
The good news is more people will be eligible.
There’s also a $500 Credit if you can claim an elderly parent.
MORTGAGE
On loans you took before Dec. 15, 2017, you can deduct on interest up to $750,000.
Older loans are grandfathered.
Can claim up to 1MILLION in mortgage debt for loans prior to Dec. 16th, 2017.
HOME EQUITY AND LINES OF CREDIT
You can’t deduct interest on credit card debt or home equity loans anymore—UNLESS the debt is used to “BUY, BUILD OR SUBSTANTIALLY IMPROVE” the home that secures the loan.
ALIMONY
For divorces that COMPLETE IN 2019 you can no longer claim money that goes to fulfill alimony obligations & Recipients no longer have to report them on their returns.
…………………………………………………………………………………………………
QUESTION: The question on many peoples’ minds: WHEN CAN I EXPECT MY REFUND?
ANSWER: If you e-file, you can theoretically get it overnight.
Otherwise, expect to wait about a month, possibly longer if you file closer to the deadline.
You can actually go to the REFUND PAGE at the IRS website to get updates.
Link: IRS Refunds
Just make sure you have your:
- Social security number or ITIN
- Your filing status
- Your exact refund amount
……………………………………………………………………………………………………………………………………………………Source:
90% jump in Standard Deduction Filings:
Recent Comments