New Tax Bill Standard Deductions
For those that opt to take the standard deduction on their taxes rather than itemized deductions, the Tax Cuts and Jobs Act (H.R 1) increases the amount you can deduct until 2025, when the provision is set to expire.
The amount goes from $6,350 to $12,000 for single filers and from $12,700 to $24,000 for those filing jointly.
2018 New Tax Rates
The Tax Cuts and Jobs Act (H.R 1) was approved by Congress and signed into law on December 22, 2017. This legislation does not apply to your 2017 taxes.
The number of brackets for 2018 going forward remain at 7, but rates overall have been lowered.
37% (over $500,000)
37% (over $600,000)
2018 Filing Season
The IRS has announced that the 2018 filing season starts on January 29th, 2018 with the deadline being April 17, 2018.
The IRS has also issued a reminder that refunds for returns claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) will be delayed. Refunds involving those credits are expected to be available starting February 27, 2018.
Prepaid Property Taxes
Prepaying 2018 state and local real property taxes in 2017 may be tax deductible only under certain circumstances.
The IRS issued the following advisory:
“In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.”
You can find the full IRS advisory (including two example scenarios) at https://www.irs.gov/newsroom/irs-advisory-prepaid-real-property-taxes-may-be-deductible-in-2017-if-assessed-and-paid-in-2017
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