The new tax law produced many changes and much confusion. Below is a summary of some of the most important tax items you should know.
Filing status remains same
There are now seven rates: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
Standard deductions have been increased
Long-term capital gain rates remain unchanged at 0%, 15% and 20% determined by income.
Alimony received will not be taxable to the payee spouse and will not be deductible by the payor spouse effective in 2019 for agreements executed after December 31, 2018. Existing agreements are grandfathered, meaning alimony is still taxable/deductible per 2016 tax rules.
A maximum deduction of $10,000 ($5,000 for married taxpayers filing separately) is allowed for any combination of state and local income taxes or general sales taxes and state and local property taxes. State income taxes imposed in 2018 may not be deducted in 2017 if pre-paid in 2017. This is important because any prepayment for 2018 will be treated, for federal tax purposes, as if paid in 2018.
Foreign real property taxes: No deduction will be allowed for foreign real property taxes
These credits remain unchanged
One or more of these changes/credits may apply to you. To find out feel free to call us at (801) 210-1553 and we’ll help you get every credit and deduction legally allowable to you.
How Much Should I Withhold in 2018?
How much to withhold has always been a complicated issue for taxpayers to resolve on their own. The new tax law will surely add much confusion to an already difficult process. TEA Tax Agency is ready and willing to help you navigate this potential minefield.
The IRS recently released updated income-tax withholding tables for 2018. These new tables reflect changes made by the newly passed tax reform legislation. The new tables reflect the increase in the standard deduction, repeal of personal exemptions and changes in tax rates and brackets.
The new withholding charts, now shown on IRS.gov, display the new rates for employers to use during 2018. The IRS has asked employers to begin using the 2018 withholding tables as soon as possible, but by no later than Feb 15, 2018. Employers should continue to use the 2017 withholding tables until implementing the 2018 withholding tables.
These new withholding tables are designed to work with the Forms W4 that you already have on file with your employer/s. This helps minimize burden on you and your employer/s. You do not have to do anything with your W4 at this time.
Employees should begin seeing increases in their paychecks sometime in February. The time it will take for employees to see the changes in their paychecks will vary depending on how quickly the new tables are implemented by their employers and how often they are paid — generally weekly, biweekly or monthly.
If you have any questions feel free to reach out to TEA Tax for help.
The IRS wants to remind taxpayers that, “by law, the IRS cannot issue refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) before mid-February.
While the IRS will process those returns when received, it cannot issue related refunds [This applies to the entire refund — even the portion not associated with the EITC and ACTC] before mid-February.
The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting on Feb. 27, 2018, if they chose direct deposit and there are no other issues with the tax return.” IRS.Gov 16 Jan 2018
As always, we at TEA Tax are ready to help with your taxes in a timely, efficient and accurate manner.
Don't wait until the rush comes, schedule your appointment today by calling/texting (801) 210-1553.
Can't come to the office? No problem, we can process your tax return remotely. Learn more: https://www.teataxagency.com/how-it-works.html