Before you file your tax returns this year, there are some changes you need to be aware of. A local tax expert says those changes will help many taxpayers in 2019.
Bill Clark, an enrolled agent at TaxPro, says there are several key differences many people may not know about.
“We’re having to explain it all to people,” said Clark. “Why can’t I deduct this anymore, or what has changed?”
Clark says most tax rates have been lowered. This means most people will pay less overall taxes.
Another change in the tax code benefits parents. The child tax credit has doubled. This means if you have a dependent child, who qualifies, your child tax credit doubles from $1,000 to $2,000. That is double the amount of money back in parents’ pockets.
“This is dollar for dollar off of your tax,” said Clark. “So this $2,000 credit now, that comes straight off the top of your tax dollars.”
There are also changes to standard deductions. The reform nearly doubles standard deductions and limits what you can itemize, like mortgage interest or state taxes. Clark says currently about 70 percent of taxpayers have standard deductions, but this could jump to 90 percent with the changes. Clark says this change is geared toward middle-income families.
“And get them out of the itemization process and simplify their tax filing,” said Clark.
The law surrounding health insurance has changed too, although the Affordable Care Act, or Obamacare, has not been repealed. But the change does repeal penalties for not having coverage. This means if someone does not have health insurance in 2019, they will not be penalized when they file their taxes in 2020.
Clark adds, many of the changes can be difficult to understand. But anyone with questions should seek an expert’s help.
For more information about some of the changes, click here.