Tax Law Confusion Filters Into Accountant Offices
While filing 2017 taxes this year will remain the same as years’ past, 2018 taxes will look much different. In the dark about the 2018 tax changes? You’re not alone.
Even if you’ve heard of the changes, there’s a good chance you might be confused.
“I wouldn’t worry about it. I would just make sure you’re not putting it out of your mind with the changes because I don’t want anybody to be shocked at tax time,” said accountant Joy Padilla Berg.
Padilla Berg says the biggest change is exemptions are gone and the standard deduction has roughly doubled.
“If you are just two people in your family, it seems to be beneficial because you’re losing $8,000, but you’re gaining $12,000.”
But if you have a larger family, you could feel some pain. That includes Padilla Berg who has three kids.
“Thousands of dollars because I have self-employment as well. So yeah, it will be thousands of dollars impact on my tax return,” she said.
The tax rate bracket is also changing with the lower and middle brackets dropping roughly 3 percent, which has contributed to people seeing more money in their paychecks.
Padilla Berg says the change will increase your taxable income, which would likely lower your refund or cause you to owe.
“We do want them to save so they’re not shocked at tax time, if it is possible to save,” Padilla Berg said.
The tax deductions and exemptions under the new law are temporary and set to expire in 2025