As Americans begin filing their taxes from the 2018 calendar year, many are noticing a significant change in their refund or amount owed. As with any change in administration, the new tax laws evoked and changes to the current system seemingly always take a few years to register. It is during this time period that the changes administered become accountable in full effect and take place as deemed necessary.
This year is no different and while many individuals expected a significant boost in their refund from one year to the next, many are seeing a slight decrease in this amount or end up owing the federal government - unlike their past returns. While the overall tax rate is reduced, there are still deductions and other filings which take place in order to determine the individual impacts of the associated tax law.
It is here where many are struggling with the changes. From the 2017 tax year until last year there has been a significant amount of changes with the new tax laws being implemented. One of the most evident involves the standard deduction and its appropriations.
The standard deduction
appropriates for many deductions and taxpayers typically have two options when filing. They can either account for their tax related expenses - donations, medical, and work related costs or take the appropriated amount given to nearly every taxpayer. These have changed significantly from years prior under the new tax laws as detailed below.
If filing a single return, the standard deduction was $6,350 for the last filing period. New changes to the deduction and law have increased the amount to $12,000 for tax year 2018. This increase of almost double the amount allows for a more generous deduction but coupled with the lower tax rate, many individuals are finding out the differences are significant when filing.
While the change doesn’t appear to be extreme, the differences are significant. While there aren’t any more of the typical deductions, these are “accounted” for with the increase in the deduction.
MARRIED FILING JOINTLY
Married couples filing together are also the beneficiaries of an increase in their standard deduction from years prior. For those who are filing a joint return, the deduction was $12,700 last year and has also increased - near double - for the 2018 filing period.
Those filing a joint return can account for a $24,000 deduction this year. This amount includes many of the deductions individuals had grown accustomed to taking but instead, are accounted for in the standard deduction this tax filing period.
The tax experts at Bloch Rothman and Associates
are ready and willing to assist with all of your questions and filing needs, including help with any questions you may have regarding the standard deduction or changes to your typical refund because of new tax laws. Serving Denver and the surrounding area for 35 years, our firm has an extensive history in helping clients with any and all of their tax issues or dealings with the Internal Revenue Service. If you have questions about your personal, business, estate or any other filings, don’t hesitate to contact us
today. Available for all of your tax needs and filings there are also a number of bookkeeping and payroll services offered to assist you and your business. We look forward to meeting you and serving whatever your needs may be soon!