In 2017, Congress passed a sweeping overhaul of the U.S. tax system, with changes that will likely impact almost every taxpayer in the country. Unfortunately, the complexity of these changes is overwhelming, so you’ll need an accountant to help you plan for the new code. Here, the financial team at Joe Heard, CPA in Checotah, OK, shares some of the most important changes contained in the Tax Cuts and Jobs Act.

Accountant Shares What to Expect in the New Tax Law

1. Adjustments to the Tax Brackets

One of the marquee changes to the tax code is a rate reduction for almost every tax bracket. For instance, a family making $60,000 per year will owe 12% in income tax, down from 15% under the old brackets. This amounts to a $1,600 tax cut, spread throughout the year.

2. Increases to the Standard Deduction

The standard deduction comes off the top, reducing the amount of taxable income. The new tax law doubles the standard deductions for all taxpayers, which is up to $12,000 for individuals and $24,000 for married couples.

3. Eliminates the Personal Exemption

While the increased standard deduction is good news, the savings might be balanced by the elimination of the personal exemption, which allowed taxpayers to deduct $4,000 per person in each household. For some families, losing this deduction might result in a higher bill.

4. Limits Local Tax Deductions

Under the new tax law, you can only deduct up to $10,000 in state, local, and property taxes, a limitation that might hit homeowners in high-tax areas the hardest. Deciding how to maximize your deductions may require the expertise of a skilled accountant who understands the new law.

With more than 15 years’ experience and expertise in a broad range of areas, Joe Heard, CPA is Checotah’s premier accounting firm. Whether you’re an individual taxpayer with complex investments or a business owner, their skilled team will reduce your exposure and navigate the complexities of the new tax code. Visit their website to learn more about their personal tax services. Call (918) 473-1492 to speak with an accountant today.