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Free webinar today – sponsored by TurboTax. Learn everything that will be different when you file your 2018 taxes from TurboTax Expert Lisa Greene-Lewis.
Since tax education likely isn’t at the top of your to-do list (33% of Americans would rather mow the lawn), here are a few big changes to help you get out of tax season alive.
1. Lower Tax Rates
If you’re a member of the completely oblivious camp, you may have have missed that five of seven tax rates are lower this year. You didn’t get a fantasy raise; that paycheck was bigger for a reason.
2. Changes to Deductions
The size of the standard deduction nearly doubled to $12,000 for single filers and $24,000 for married couples, but that comes at a price. Quite a few itemized deductions including those for moving expenses and alimony have been eliminated.
3. Elimination of Personal and Dependent Exemptions
Speaking of eliminations, personal exemptions are now a thing of the past. Once upon a time in 2017, filers could claim $4,050 per taxpayer, dependent and spouse.
4. Increases in the Child Tax Credit
Good news parents, that rugrat just got more lucrative. The child tax credit increased to $2,000 from last year’s $1000 and the new code adds a $500 credit for non-child dependents (Looking at you, basement dweller.)
Not eligible last year? You’ll want to check again since the income limit was raised to $200,000 for single parents and $400,000 for married couples.
5. Changes for Homeowners
That white picket fence may not be as much of a saving grace this year. Previously, state and local property, income and sales taxes were fully deductible. Now that number is capped off at $10,000.
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