Now that tax season is right around the corner, it’s wise to review how the 2018 tax reform bill will affect your financial situation. Since this is the first return for which the new regulations apply, it’s natural to have a lot of questions about this year’s tax prep. Fortunately, a seasoned accountant can answer them all. In the meantime, here’s what you should know about the new laws in general and how they might affect your overall tax burden. 

For Those Who Have Dependents 

In 2017, those with qualifying children under 17 could claim a credit of up to $1,000 for each of them. When filing your income tax return for 2018, you may claim up to $2,000 per qualifying dependent. It’s important to note that this is a credit, not a refund. In other words, it directly reduces how much you owe the IRS. If you do not owe any money at the end of the year, up to $1,400 of this credit is refundable. Additionally, those who have children between the ages of 17 and 24 — or dependents who are elderly or disabled — may claim a credit of $500 per qualifying individual. 

For Everyone Else

Even if your income barely changed from 2017 to 2018, your tax situation may have. The tax reform bill changed the income tax brackets considerably. The top rate decreased from 39.6% to 37%, for example, and the new brackets were simply doubled for those who are married and file jointly. In other words, there is no longer an unintentional penalty for some married filers. Prior to the bill, some individuals who filed jointly ended up in a higher bracket. Another notable change is the standard deduction. It nearly doubled for all filers. In 2017, the standard deduction for single filers was $6,350, while for 2018, it’s $12,000. 

For expert help with your tax prep this year, turn to JJR & Associates LLC. Serving individuals and businesses throughout the greater Atlanta, GA, area, this accounting firm is comprised of a knowledgeable team that is committed to obtaining the deductions you qualify for. In addition to tax prep, they offer comprehensive financial services, including bookkeeping, IRS representation, business structuring, and payroll administration. For more helpful tax prep tips, visit their website. To schedule a free consultation, call (404) 437-7748 today.