MYRTLE BEACH, SC (WMBF) - Tax experts say there are major changes to be on the lookout for this year as a result of President Trump’s Tax Cuts and Jobs Act. One change that should benefit Americans under the new tax law is the increase in standard deductions, or the portion of your income that is tax free.
Under the previous code, the standard deduction for individuals was $6,350. Now, it will be almost doubled at $12,000. For married couples filing jointly, it also nearly doubled from $12,700 to $24,000. But personal exemptions that work like standard deductions are going away. Therefore, interest paid on new home equity loans may no longer be deductible.
“So personal exemptions which used to be $4,000 per person on your tax returns, that’s now been reduced to zero. And that can be a pretty big deduction if you have a large family, so even if you’re, if you’ve lost that personal exemption, they have upped some other credits to help compensate that a little bit," said Samantha Slapnik with Liberty Tax Service.
The 1040 tax form will now be condensed to the size of a postcard. But there will still be six pages of information taxpayers must fill out. Tax bracket rates have changed with most rates lowered this year. But keep in mind, withholding also has changed.
“So, February last year you got more in your paycheck week to week or month to month. So, the income tax bracket change is not going to be a big effect on your tax return. You’re not going to get more now because you got more month to month throughout the year in 2018,” said Slapnik.
Tax experts say for personal casualty and theft loss, taxpayers cannot claim it unless their loss was incurred in a federally declared disaster. This means Hurricane Florence victims are safe here and have the option to amend last year's or include the losses on their 2018 return. Under the new tax laws, miscellaneous deductions like job expenses or tax prep fees can't be claimed anymore.
“If you moved for a job, you used to be able to deduct those expenses within the state, or even state to state. Now that’s been suspended through 2025,” said Slapnik.
The IRS recently announced that it will start accepting 2018 tax returns on January 28. The deadline for filing your tax return is April 15.