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Trump Shutdown Shouldn't Affect Your Taxes, But These 6 Changes Will
SmartAsset - copyright 2018
Tax season is fast approaching and the Trump Administration has indicated that tax refunds will not be affected by the partial government shutdown over border security funding.
Although the plan was enacted in 2018, many of its key components won’t be felt until you file your taxes this year.
Here are the biggest tax differences to look out for when filing your 2018 taxes.
1. Federal income tax rates decreased for almost every bracket. There are still seven tax brackets with marginal rates of 10%, 12%, 22%, 24%, 32%, 35% and 37%.
2. The standard deduction nearly doubled to $12,000 for single filers (up from $6,350 in 2017) and $24,000 for joint filers (up from $12,700 in 2017).
3. The personal exemption, which is $4,050 for 2017, has been repealed for the 2018 tax year.
4. The state and local tax deduction has a cap of $10,000. It had no cap previously.
5. The federal estate tax exemption nearly doubled from $5.49 million in 2017 to $10 million.
6. The Affordable Care Act mandate enforcing a tax penalty for not having health insurance is no longer in effect as of January 2019. However, if you did not have health insurance in 2018, you will still be responsible for the penalty.
The Best Way to Adjust Your Tax Strategy
Before sitting down to file your taxes for 2018, it’s important to understand how your finances will affect your taxes and plan for any potential windfalls or tax bills. A financial advisor can assist you in this.
Many financial advisors are experts in tax law, as well as financial planning, and can guide you through the best strategy for filing your taxes and how to invest your tax refund, if you’re eligible. Alternatively, an advisor can also assist you in planning a budget to settle any tax bills.
Chances are, there are several highly qualified financial advisors in your town. However, it can be daunting to choose one.
This new tool makes it easy to find the right financial advisor for you. Now you can get matched with up to three local fiduciary advisors that have passed a rigorous screening process.
1. Simply enter your ZIP code below.
2. After you enter your ZIP code and answer a few questions about your financial goals, you can compare up to three top advisors local to you and decide who to work with.
3. Enjoy a better financial future!
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SmartAsset - copyright 2018