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The Republicans have finally shared the long-awaited tax plan, known as the Tax Cuts and Jobs Act, but it hasn’t made it through the legislature just yet. While the details of the plan are known, it’s unclear how much of it will be implemented. Sharrard McGee & Co PA are keeping abreast of the news for their clients in High Point and Greensboro, NC. Here, the tax advisors explain which changes you can expect and which questions you should ask for tax time.

Which Changes to Expect

The tax plan creates new individual tax brackets, reducing the number of tax brackets from seven to four. The lowest tax rate could now be 12% instead of 10%, but the highest bracket remains at 39.6% for any individual whose adjustable gross income is over $500,000. This most notable change is aimed at simplifying the tax schedule.

The standard deduction could increase significantly, but the personal exemptions may get cut. This is beneficial for married couples, but it could have a negative result for larger families. On the bright side, the plan is to boost the child tax credit by 60% which could offset the missing personal exemptions.

tax advisorMany other deductions may no longer be available. These include the student-loan interest deduction, the tuition and fees deduction, the alimony, and moving-expense deduction. Even the credit for qualified adoption expenses may disappear.

Business owners stand to benefit as the income tax rate on pass-through entities is capped at 25%. Wealthy individuals also benefit from the phasing out of the estate tax, which may disappear by 2024. And while individuals can no longer deduct state and local taxes on their itemized deductions, business owners may be able to claim this deduction through a loophole in the tax code.

How Your Tax Advisor Can Help

Until the new tax bill is finalized, your tax advisor won’t be able to tell you exactly how you will be affected personally. However, they may give you some ideas based on your current situation. To help you prepare for tax time, you’ll want to find out which records you should keep to claim the deductions and credits that will be available to you.

With these changes coming up, it’s a good idea to talk to a tax advisor about your tax obligations as soon as possible. Give the office of Sharrard McGee & Co PA a call at (336) 884-0410. These experienced tax accountants are following the recent developments closely to provide expert advice for their clients. They can help you with your personal or business tax returns and tax preparation questions. Visit the website to learn more about the services they offer.

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