You’ve probably already heard about the changes made to the tax code since the beginning of this year. You may have even noticed a heftier paycheck. But how will that affect you during tax season when you’re filing?
Here’s a recap of major changes from the 2018 Tax Reform:
- Reduces the individual tax rate for most income brackets
- Doubles the standard deduction from $6,350 to $12,000
- Eliminates tax penalty for not having health insurance (not for 2018, but for 2019
- Eliminates personal exemptionsNow what the hell does that actually mean for you?
Well, depending on your income, you may see a significantly lower tax rate. Here are the new rates:
On the bright side, because the standard deduction has doubled, you will generally have less taxable income than last year. Individuals can subtract $12,000 and married couples can subtract $24,000. If you don’t have health insurance, you can expect to no longer see that tax penalty come April 2020 when you file 2019 taxes.
The bill also eliminates personal and dependent exemptions, so you may see an increase in taxes if you have children.
These are just a few of the many changes to the tax law that not only affects individuals but businesses too.
My tip for you today: Don’t stress yourself out about memorizing all of these changes when it’s time to do your taxes. Consider working with an experienced tax professional for help. Everyday, I am thinking of new and easy ways to teach taxes to business women like you so stay tuned by following me on social media!
For a deeper dive on the changes, you can check out fool.com’s guie
P.S. Don’t forget to follow me on Instagram! @ChikaObihCPA