Tax season is officially here.
With the new Tax Cuts and Jobs Act (TCJA) bill now law, accounting professionals around the states are adjusting their practices. The bill is the most significant since 1986. It comes as no surprise that representatives on both sides of the aisle are studying the almost five-hundred-page document in order to properly serve their constituents. To save you and your firm time this tax season, we’ve highlighted a few below.
This tax season, expect changes.
- Fewer miscellaneous deductions. Maybe you’ve chalked it up to not everyone receiving their W-2s yet, but have you noticed not as many customers making appointments? This year, fewer people are choosing to use a professional to prepare their taxes. Because of the TCJA, miscellaneous itemized deductions, such as tax preparation fees, are being eliminated.
- More breaks for families. The TCJA will increase the maximum child tax credit from one-thousand to two-thousand through 2025. In 2026, the child tax credit will change back to a maximum credit of one-thousand per qualifying child.
- Change in medical deductions. For 2017 and 2018, taxpayers can deduct medical expenses if they exceed 7.5% of their adjusted gross income (AGI). In 2019, that percentage will increase to 10%.
- More charitable donations. Under the TCJA, a taxpayer can deduct up to 60% of their AGI, up from 50%.
- Double deductions. Because of the TCJA, the standard deduction for individuals or joint filers will almost double. This lowers the amount of people who are able to itemize their deductions.
Thankfully for tax professionals, the deadline to file this year has been extended to April 17th. So, put on another pot of coffee, log in to the Right Networks Cloud and get to work. With QuickBooks Desktop connecting to all the applications you need, you can work from anywhere to make the deadline.
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