MYRTLE BEACH, SC (WMBF) - If there was ever a better time to sit down one-on-one with your tax professional, this might be the year.
With so many tax changes, there's plenty to discuss, including how to best complete your 2017 tax return.
Tax professional Neville Mahoney, owner of Liberty Tax Service in Conway, said not all the regulations of the tax law have been completed. In fact, expect to see more updates coming in the future.
Still, Mahoney said you must first understand which laws will affect which tax returns.
"For 2017, there really aren't that many changes because the law became effective in January 2018," he said.
Mahoney said the biggest question everyone wants to know is how will taxes change in 2018?
Well, about 70 percent of Americans who take the standard deduction on their tax return will see their tax bill likely go down. Mahoney says the new law creates more generous tax brackets and rates. In fact, itemized tax deductions will be capped at $10,000, but the standard deduction nearly doubles.
Mahoney added that while most will see more tax breaks, the law also eliminates some ,specifically an exemption deduction that would give an over $4,000 tax break for larger families.
"With the new law, the standard deduction of $6,350 for individual goes up to $12,000, so it doubles almost," Mahoney said. "The exemption deduction will cease starting January first of this year if you have multiple people in your household and they are on your tax return. It won't benefit them as much as a single person or married people."
Mahoney said you'll see changes for earned income credit and also your child tax credit will double.
"For 2018 and beyond, until 2025, the child tax credit will be $2,000 per child," he said.
The next question most have is will they need to adjust their withholding allowances?
"If you're using an old W-4 from 2017 - let's say in 2018 - more than likely the tax deductions will be less and it may put you in a tax burden at the end of 2018, so it's advisable to fill out a new W-4 form, which I believe is coming out sometime in February," Mahoney said. "Employees need to go to their HR department, get the W-4 and fill it out."
Those who are are thinking of divorce should consider this year, because the new tax law eliminates deductibility for alimony payments on divorces finalized after 2018.
Mahoney said neither payments nor alimony income can be claimed.