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Financial
Apr 20, 2018

Beware the New Tax Laws!

Sponsored Content provided by Karen Durda - President, Enrolled Agent, Century Accounting and Tax Services, Inc.

Didn’t we just file our 2017 taxes?
 
Yes, we did and now is the perfect time to make sure you are not going to be surprised when you file the 2018 returns. Planning and review of your paystubs is a must for everyone but especially for years where new tax laws make a dramatic change.
 
If you have an employer who withholds taxes, you may have seen a slight increase in your take-home pay. This was due to tax tables accounting for the lower individual tax rates. If you owed in 2017, you may wish to change your withholding to reflect the correct amounts due.
 
Now for more of the changes you may see on the 2018 return and planning to do going forward.

The Child Tax Credit which used to be for children under 17 and capped at $1,000 now has increased to $2,000 per child and, most significantly, the income limit has gone from $110,000 to $400,000 for married couples filing jointly. While losing the exemptions, this is supposed to ease that loss.
 
While children over 17, who live with you, no longer get the exemption on your return, you may receive $500 credit for them. Likewise, if you care for an elderly parent, you may receive the $500 credit, as well. Parents are the only dependent who does not have to live under your roof, but you must still provide more than 50 percent of their upkeep and expenses.
 
Owners of Educational 529 plans have more options than post high school educational expenses. Now holders may withdrawal up to $10,000 for private and parochial elementary or secondary school tuition. Just check your state and plan options beforehand. You may not use the money for home-schooling expenses.
 
Finally, a few more items of note:

  • Alimony will not be taxable to the recipient nor deductible to the payer if the agreement goes into effect after 2018.
  • The ACA penalty is repealed in 2019. Therefore, you must still have coverage for 2018. The penalty remains at $695 per adult or 2.5 percent of household income (this includes all members of the household), whichever is higher.
  • The capital gains tax rates remain the same for long-term (a year and a day) and short-term capital gains are taxed as ordinary income rates.
Karen S. Durda, EA, President of Century Accounting and Tax Services, Inc., has been in the profession since 1984. As an Enrolled Agent credentialed by the Treasury Department, she has the rights as afforded by Congress to represent individuals and businesses before tax authorities. Since May 2012, she has also had the distinction of being a Dave Ramsey Endorsed Local Provider, assisting in budgeting and financial peace for a four-county area and parts of Myrtle Beach.As a Qualified Business expert with the New Hanover County courts, she has experience and knowledge of various scopes of professions and industries, such as medical, health services, legal, construction, retail, real estate, auto sales and service, insurance and restaurant. Continuous tax law courses throughout the year keep her up-to-date on all tax rules, regulations and law changes, as well as business trends, to better serve her clients.

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