There are changes to the tax laws coming for the 2018 tax year, which will be used by filers who are getting their taxes ready in April of 2019. For those who have someone else handle their individual tax preparation, these laws may not seem to matter much. Someone else will be handling the details.
Still, whether you pay someone to do your taxes or handle them yourself, it is a good idea to know what kinds of changes you will see to the laws that affect your finances. The two biggest changes you will want to be aware of will be lower income tax rates and changed ranges of income for tax brackets. Both will benefit many people.
Lower Tax Rates Mean You Can Keep More of Your Money
The tax rate is lower than it was for the 2017 tax year, meaning that nearly everyone will pay less in taxes for the same amount of income. That is good news, since it means more of the money you make will stay in your pocket or bank account. While it is not a big change, both single people and those who are married and filing jointly will see breaks.
Married people who file separately and those who file as head of household will also see their taxes decrease a little bit, provided they don’t have any big changes to their statuses or income levels between the 2017 and 2018 tax years.
The Income Tax Brackets Have Been Adjusted for 2018
When you look for someone to handle your individual tax preparation, you want to make sure he or she puts you in the right income tax bracket. These brackets still start at 10 percent, but now they move to 12 and 22 percent, instead of 15 and 25 percent. Some of the higher tax brackets have also been lowered by a couple of percentage points each.
People who might have been in a particular tax bracket for 2017 can find themselves in a lower bracket for 2018, and the difference between paying 12 percent and 15 percent can really add up. These changes will help many people keep more of their hard-earned income.
At Larry Turner, CPA, we have been serving Gilbert for 25 years. We know the tax laws and keep up with all the changes, so you can feel good about getting your taxes prepared by us. With extensive formal training and experience with the changes in the new tax law, we can address any and all concerns you have about the laws and how they will affect your personal financial future.