2018 Tax Law Changes

The House and Senate have passed a tax reform bill that could dramatically change what you have anticipated for your tax refund or bill. These new rules may benefit you significantly.

On the other hand, the new 2018 tax law changes could dramatically reduce your tax refund. This will depend on your assets, investments, children, and any businesses that you may own.

I will outline the key changes for you in this article. You can also get an estimate of how the 2018 tax changes will impact you with the Wall Street Journal tax plan calculator.

The 2018 Tax Law Changes are as follows:

The tax brackets have been adjusted for individual filers and income tax rates have been reduced

The individual tax brackets for 2018 have been reduced and income tax rates have been lowered. These adjustments are set to be in place until December 31, 2025, unless Congress makes any new adjustments to the tax code.

I have included the new tax table with the tax brackets and corresponding taxable income reductions.

Tax brackets and taxable income table for 2018

Currently, corporate tax brackets are at 35%, they will be lowered to 21%. These are permanent changes and are not set to expire in 2026.

Standard Deduction Increased

The standard deduction and personal exemption have been combined forming a higher standard tax deduction.

Currently, the standard deduction is $6350/individual and married filing separately, $9350/head of household, and $12,700/married filing jointly.

The 2018 tax law changes are $12,000/individual and married filing separately, $18,000/head of household, and $24,000/married filing jointly.

standard deduction of 2018

Child Tax Credit Increased

The child tax credit has been increased from $1000 to $2000, also it increases the amount of the credit that is refundable to $1400. For children over 17 years of age, you will receive $500.

The child tax credit of 2018 phase out at $400,000/married filing joint, $200,000/individual. This is a pretty big increase from the previous limits of $110,000/married filing joint and $75,000/individual.

New Dependent Tax Credit

There is a new dependent tax credit for 2018. Previously, there was no dollar amount/credit assigned to non-child dependents.

The amount that the credit is $500 and applies to non-children, elderly parents, and adult children with disabilities.

Senior Citizen Standard Deduction Increased

The standard deduction for senior citizens (over age 65) has been increased.

Currently, the current deduction for is $1,500/individuals and $2,500/married filing jointly. The 2018 tax law changes are $1,600/individuals and $2,600/married filing jointly.

For the senior citizen’s deduction for married filing joint both spouses need to be over the age of 65.

These new terms will expire if not renewed or adjusted for taxable years after December 31, 2025, and 2017 tax regulations would resume.

With the higher standard deductions, it will not be beneficial to many families to itemize deductions. This will depend on your specific household financial situation.

In addition to the above changes, there are many adjustments that have been made to 2017, tax credits and deductions. I have detailed these items below.

Mortgage Interest

The mortgage interest deduction for 2018 has been decreased from $1 million/primary, second homes, and some home equity debt and limited to $750,000/primary and secondary homes.

This provision applies for taxable years after December 31, 2017, and expires after December 31, 2025,.

State and Local Tax Deduction (SALT)

The state and local tax deduction has been capped at $10,000/sales and state and local property taxes or sales and state and local income taxes.

Medical Expense Deduction

The medical expense deduction for 2018 has been adjusted. Previously, medical expenses that were greater than 10% of the AGI (adjusted gross income) were deductible.

This threshold has been lowered to 7.5% for 2018. This deduction can also be claimed for tax year 2017,.

Adoption expense tax credit

The adoption expense tax credit for 2018 remains unchanged with qualifying expenses up to $13,570.

Retirement Savings Incentives

Retirement savings incentives for 2018 remain the same. Since the current 2017, retirement incentives and contribution limits are considered favorable the new rules do not call for any changes.

Health savings accounts have also rules have also remained intact.

Roth IRA recharacterization options are over for 2018; however, 2017, recharacterizations will still be permitted.

Temporary Increase in Federal Estate Tax Exemption

The federal estate tax exemption of 2018 will temporarily be increased to $11 million/per person ($22 million/couple). The law change will revert to the current law after 2025,.

Changes to AMT (Alternative Minimum Tax)

The AMT will raise the minimum income level at which the AMT will apply. The Alternative Minimum Tax of 2018 will increase from $50,600 (AMT of 2017,) to $70,300/individuals and from $78,750 (AMT of 2017,) to $109,400/married filing joint.

The Alternative Minimum Tax was intended to stop those with high incomes from avoiding paying their income taxes via stacking credits and deductions.

New Corporate Tax Rate and Pass-Through Tax Rate

The corporate tax rate for 2018 will be reduced to 21% and this tax law change is not set to expire as the others are in 2026. This change is permanent.

Sole proprietorships, pass-through businesses, S-corporations, and partnerships will be taxed at individual rates and will be able to deduct 20% of income.

This deduction will only be available to married filing jointly with income below $315,000 to avoid those with high incomes taking advantage.

Those with higher incomes will have more complicated rules, however, there are specific businesses that may still have eligibility for a limited deduction.

529 Plans Become More Flexible

The 529 plans of 2018 allow up to $10,000/year to be used for expenses for grades K-12, college, and post-graduate studies. Certain circumstances will allow for a temporary increase in contributions limits for ABLE accounts.

February Paycheck Income Tax Withholding Decreases

Due to the 2018 tax reform changes, your employers will be withholding less money for income taxes from your paychecks no later than February 15, 2018. This law was released by the Department of Treasury and the IRS on January 11, 2018, click here for more detailed information.

Well, that sums up the 2018 tax law changes for the tax brackets, rates, deductions and credits.
If you have a tax agency prepare your taxes for you they will have all the updated information, however, it is always a good idea to have this information for better financial planning.

If you are like me and prepare your own taxes, this information is imperative to have. I use Turbotax which has a live CPA and tax professionals to assist with any questions that may arise. If you want more information on Turbotax you can check out my Turbotax review by clicking here.

If you have any further questions or comments, feel free to leave them below and I will get back to you right away.

Intuit TurboTax Review

In this article, I will be providing you with a detailed, honest  Intuit TurboTax review of their tax preparation software. You can get this product in the form of a CD from your local computer, electronic, or convenience store, or you can
start filing online for FREE right away. I recommend the online version as CD’s can be lost or damaged; and in this case, they are completely unnecessary. TurboTax saves all your tax forms on their servers and they are accessible whenever you need them.

Since the 2018 tax year is here with the e-file date of January 29, 2018, you need to know how you will be filing your taxes this year.

Name: TurboTax

Website: https://turbotax.intuit.com

Price: $0 – $149.99

Owners: Intuit

Overall Rank: 5 Stars

TurboTax Overview

TurboTax is the #1 best-selling tax preparation software available for use to the public. Gone are the days when you must pay hundreds to thousands of dollars to get your taxes filed. Depending on your financial situation and the assets you hold, the most you will pay with TurboTax is $149.99; and that is the largest product that contains filing information for business owners. Many who don’t own their own business, home, or have many assets or expenses qualify to use Free Edition of TurboTax.

Turbotax makes it easy to file your taxes like a professional. All you do istaxes with 100 dollar bill 3d answer simple questions about your life situation; the answers to those questions are used to complete the necessary tax forms. It’s so easy that a child could do it! TurboTax calculations are 100% accurate, and that is guaranteed! All tax laws are up-to-date, so you can rest assured that you are getting every tax deduction and credit that you are entitled to.

The Good & the Bad

The Good:

User-friendly interface

Step-by-Step Instructions

good check mark and bad x mark

Start Filing for Free

Pay Nothing Out of Pocket

Audit Support Guarantee

TurboTax Mobile App

The Bad:

The only downside associated with the Turbotax preparation software is that to get the maximum amount of deductions, depending on your assets, you will have to purchase the Deluxe, Premier, Self-Employed or Turbotax Live products. The Free Edition will not be sufficient.

In addition to the cost of the products, there is a mandatory filing fee required by the federal and state government, with the exception of the Free Edition which is free for all.

TurboTax at a Glance…

TurboTax can be used by anyone who is required to file a tax return over the age of 18. You don’t need to be a professional CPA or tax preparer to use this service.

In addition to tax preparation products, TurboTax includes a free service called Intuit Turbo; information on verified income, credit scores provided by Transunion and your debt-to-income ratio with personalized tips based on tax and credit data.

The current products offered by TurboTax are listed below in the chart.

TurboTax tax preparation software products

==>To Start Filing your Taxes Now Click Here!<==

TurboTax Tools

Multi-factor authentication, touch ID, data encryption, login device history, auto email notifications

TurboTax Live – Live help from tax preparation professionals and CPA’s.

Tax Tips and Videos – Featured and recent tax tips and videos to help you with tax credits and deductions as well as self-employed information.

ItsDeductible Donation Tracker – Track all your charitable donations for tax return credits.

TaxCaster Refund Calculator – Estimates tax refund or amount of taxes you will owe.

Tax Bracket Calculator – Enter filing status and taxable income to determine the tax bracket you fall in.

E-File Status Refund Tracker – Check filing status and refund dates with the IRS.

Self-Employed Expense Estimator – Estimates tax saving based on yearly work-related expenses.

TurboTax Support

Turbotax provides 24/7 support for both tax and products; answers are provided by experts. There is an FAQ section, you can browse Q & A’s by topic, or search for your answer by typing in your question. In addition, there is aTurbotax support options community where you can post your questions if you cannot find your answers in the AnswerXchange.

There is also a blog which can be personalized, if you do so you can receive an additional 10% off whichever Turbotax product you choose. It also includes news topics that you can filter by; most popular, most recent, author, and category.

The TurboTax blog covers topics such as tax deductions and credits, tax planning, income and investments, news and social, tax reform, and self-employed topics.

TurboTax Prices

The pricing for Turbotax ranges from FREE to $149.99 depending on which product you go with; Free Edition, Deluxe $39.99, Premier $59.99, Self-Employed $89.99, or TurboTax Live $149.99.

The Free Edition is free because this version is for simple tax returns, for those that don’t have assets such as houses, businesses, or rental properties. The Deluxe product is the most popular because it includes the ability to maximizePricing question your deductions and credits which leads to a larger refund.

Premier Edition includes all features of the Free and Deluxe Editions, however, will maximize credits for those with investment and rental properties.

The Self-Employed Edition includes all features of the Free, Deluxe and Premier Editions but maximizes business income and expenses.

Of all TurboTax products this my favorite because all deductions and credits are maximized. Additionally, you receive immediate support for any questions that you may have while filing your taxes.

Click here now to see why I prefer TurboTax’s Self-Employed Edition.

My Final Opinion of TurboTax

Intuit TurboTax Review
  • Price
  • Usability
  • Website
  • Support
4

My final verdict on Turbotax is that it is legit product and by far the best tax preparation software available. I have used this product every year since 2008
so I can say with 100% certainty that TurboTax is a reputable product, very easy to use, and does maximize your tax refund.

The amount of my tax refund when using Turbotax was much higher than when I would go to H & R Block tax preparation service. Additionally, I get my refund back 9 days after I file. TurboTax says that you should receive your tax refund back within 19 days, personally I have never waited more than the 9 days.

For those of you who are not familiar with H & R Block, it is a tax preparation agency. They charge a large fee for their services and it can fluctuate depending on the amount of your personal refund. Of course, they do not advertise their fees this way; however, you find this out when you have been there and invested a couple of hours of your time.

The same services that you receive from tax professionals you can do for yourself. The same questions they are asking you to complete your tax forms are the same questions that Turbotax asks you to answer to complete the tax forms on their software. Therefore, you do not need to pay anyone to do this for you. Do it for yourself and save your money!

Well, this concludes my review, I hope that I have provided you with enough information to make an informed decision. If you have any further questions feel free to leave them below and I will get right back with you with an answer.

Click here now to file your tax returns and get the biggest refund you have ever received!

Best Online Tax Preparation Sites

Best Online Tax Preparation Sites 

Every working person in the United States all have one thing in common, we all must file taxes. It is almost that time again! Many people are terrified of filing their own taxes, and because of this tax preparation companies are making a killing. People do not realize how much money they would be saving if they filed their own taxes. I believe that many more people would file their own taxes if they knew how easy it is to do on their own.

I have been filing my own taxes for many years. Prior to that, I used to have agencies such as H & R Block file my taxes for me. The amount of money that they used to charge for the filing fees were ridiculous, that is why I was determined to learn how to file my own taxes. Thankfully, it was much easier than I had anticipated. Preparing my own taxes was one of the best financial decisions I’ve ever made. It feels great to save the hundreds of dollars that I used to pay to the tax preparation agencies. For those of you that are considering filing your own taxes for 2017 but do not know where to start, I have a few options for you.

Intuit Turbotax

Turbotax is an easy-to-use platform with a great user interface that you can use to prepare and file your own federal and state taxes. Tax forms are available for different types of tax filers; individuals and business owners. There are four different products; Federal Free, Deluxe, Premier, and Self-Employed. The prices range from $0-$114.99. There is a side-by-side comparison chart for each tax filing product. In addition, there are tons of support given by licensed tax professionals to answer any questions you may have. Personally, I prefer Turbotax over any other tax software. Check Out My TurboTax Review Here.

Intuit Turbotax Canada

Turbotax Canada is like the original Turbotax except that it is for Canadian residents. They have four products; Free, Standard, Premier and Home & Business. Their prices range from $0-$49. It seems that their Canadian products have a lower price point than their US counterpart. Turbotax Canada does have a 60-day money back guarantee.

 

 

E-Smart

E-Smart is backed by Liberty Tax and is another user-friendly option to file your federal and state tax forms. There are four different products; Free, Basic, Deluxe and Premium. The prices range is from $0-$59.95 so their packages have a great price. There is 24/7 support and the new tax code laws are available. There is a 100% accuracy guarantee. For 50% off of all online tax filing solutions go here.

E-File.com

E-File.com is an authorized IRS e-file provider and was one of the first platforms which allowed for the electronic filing of your taxes. There are three products; Free Basic, Deluxe and Premium. The prices range from $0-$39.95 for federal filings; state tax filings are an additional cost. E-File.com has a meet ‘n beat price match guarantee and tax calculators.

TaxAct

TaxAct has online and downloadable products to choose from. They have three products; Free, Plus and Premium. The prices range from $0-$47. TaxAct has a price lock guarantee in addition to a personalized financial assessment. Their platform is also very user-friendly. They do save your prior year taxes.

Personally, I use Turbotax every year. It’s very user-friendly and walks you through all the necessary forms that you need for a complete tax filing. After your tax file is complete you have the option to e-file or you can print it off and send it in. It is much quicker to e-file; I usually get my refund direct deposited in my checking account within 9 days of the e-file.

I hope this has been helpful. If you have any further questions, please don’t hesitate to ask.