We met with local neighbor, Steven Dollar from Dollar Income Tax, to help us breakdown some of the changes which came from the 2018 Tax Reform Bill. Below are some of the highlights to share:
1. How did the standard deduction and exemptions change under the new law?
With the passing of tax reform, the standard deduction available for each filing status significantly increased to up to $24,000 for married couples, $12,000 for single, and $18,000 for head of household. The personal exemption was eliminated, but the good news is that to offset that loss, the child tax credit doubled to $2,000 along with a new other dependent credit of $500.
Under the old rules the exemption acted like a deduction, reducing filers’ taxable income for each person claimed. But the credit, which takes its place, will cut filers’ tax bill dollar for dollar.
2. Is it now better or worse for me to claim the standard vs itemized deductions?
If you’re among the many taxpayers who are concerned that not itemizing deductions in 2018 means you’re at a disadvantage – you can relax. For many, it’s actually the opposite.
An increase in the standard deduction doesn’t mean you lose the tax benefit of the deductions you itemized in the past. You simply get the deduction without needing to show proof of the deductible expense – or even have it at all. That means you actually reap more tax benefit by using the standard deduction than you would have by itemizing.
3. Can I still itemize if I have lots of deductions?
Yes! If your itemized deductions total to more than the new standard deduction, you can and should still claim your deductible expenses on your tax return. It’s important to calculate the difference to see which is higher. And in some cases, it’s beneficial to itemize even if it’s lower than the standard deduction because it will help you on your state return. We explore all options for each individual to help you the most!
A note from Steven Dollar:
These changes and others are why it is so important to use a Tax Consultant, not just a preparer, to help you file your taxes. Our company has been here in the West End for over 40 years. We are a family owned company and our combined experience of over 108 years is what makes us a valuable resource when filling your taxes. Our Clients return to us year after year because they trust us to guide them and advise them on not just their current situation, but changes to their future tax liabilities due to retirement, births, deaths, and adoptions. We don’t just enter numbers and tell you what you will get or owe, we actually show you and explain how it works so you can understand and make informed decisions about your own financial goals.
We aren’t interested in customers for a day. Our goal is to have clients for life, providing consistent and knowledgeable service.
Steven Dollar, Owner
IRS AFSP Participant
Dollar Income Tax Service, LLC
587 Cascade Ave SW
Atlanta, GA 30310
404.753.8048
www.DollarincomeTax.com
Please let us know if you have any questions.
we will try and help you find your answers:
