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What will the Tax Cuts and Jobs Acts mean for you?

August 22, 2018

How will the Tax Cuts and Jobs Act of 2017(TCJA) affect your 2018 taxes?  Here is a calculator from The Tax Foundation, a nonprofit tax policy group, which will help you to navigate the possible outcome for your 2018 taxes.

 

https://taxfoundation.org/2018-tax-reform-calculator/

(there is a link to add to the website that will allow you to embed the tax calculator shown on this page)

 

Since the Tax Cuts and Jobs Act of 2017 (TCJA) changed the tax withholding tables for Americans in February 2018, many people saw additional money in their weekly paycheck.  But will this reduction in withholdings cause you heartbreak come filing season?  IRS recommends that every taxpayer perform a Paycheck Check Up to determine if you are having enough taxes withheld from your pay.  The link to their site is below, and by inputting information from your last pay stub (and that of your spouse if filing jointly), you can get a rough estimate of how your withholdings are stacking up against your needs when you file in 2019. 

 

https://www.irs.gov/individuals/irs-withholding-calculator

 

A lot of taxpayers affected by the TCJA of 2017 are unsure if they will be itemizing on their 2018 tax returns, and we have often fielded the question, “Do I, or don’t I save those receipts?”   I have been recommending that if you were close to the $24,000.00 range for itemized deductions for 2017 taxes that you do save those receipts for charitable donations, real estate taxes, mortgage interest, and medical expenses.  Since 2018 will be the “test year” for how the filings will work, being prepared for either eventuality is the best policy!  Below is a link that explains the changes in what does and what does not qualify as an itemized deduction for 2018.

 

https://www.irs.gov/individuals/steps-to-take-now-to-get-a-jump-on-next-years-taxes

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