WHAT’S BEING CLAIMED:
- Enjoy the tax deductions while you can when you file your federal income taxes this year because you may not be able to claim many of these deductions for the year 2018.
- President Donald Trump signed a tax reform bill into law in December eliminating some deductions and replacing them with some higher standard deductions.
- The 2017 standard deduction for single filers and for married couples will be increased in the reformed tax bill in 2018.
It is expected that in 2018, the reformed tax bill will encourage more taxpayers to take their new standard deductions and make the tax-filing procedure less complicated. Just like the notorious “file your taxes on a postcard” idea.
Even the deductions that were spared from Trump’s tax bill will be claimed less often because Americans will need to reach a higher threshold to itemize at all.
The standard deduction for single filers for 2017 is $6,350, but it will rise to $12,000 in 2018. The 2017 standard deduction for married couples who are filing jointly will increase from $12,700 to $24,000.
But married couples have a choice to file either jointly or separately on their federal income tax returns. The IRS urges most couples “to file joint tax returns by extending several tax breaks to those who file together.” In a wide majority of cases, it’s recommended for married couples to file jointly, although there may be some instances when filing separately is the better option.
If you made any big purchase last year, like a vehicle or new home appliances, then if you file a Form 1040 and itemize deductions on Schedule A, you can now choose to claim either state and local sales taxes OR state and local income taxes. It’s a good thing if you kept your receipts throughout the year, you can total all the sales tax amount you paid and claim that amount.
Owning a house also brings numerous tax breaks and it’s your decision to take full advantage of the write-offs available to you.
Find out how to take advantage of tax breaks to alleviate the monetary burden of sending kids to college, including tax credits, tuition deductions, tax-free savings and more.