How Did The 2019 Tax Changes Affect You?
Brian T. Boyd is a tax attorney in Brentwood, Tennessee. Since the Trump Administration announced its plan to reform the United States tax system, he has fielded many questions about how these new laws will affect both businesses and individuals. With tax season now officially over, he believes that it is a good idea to take a look back at the impact of Tax Reform.
Things are still murky
According to the tax attorney in Brentwood, there are still many who do not fully understand the recent tax changes. Some single and married filers, for example, received an unexpected refund after paying. Business owners may also feel unsure about the taxes they paid out in 2018. Most accountants and tax preparers are just now grasping the ins and outs of the new laws. It is important to keep in mind that the US has not seen a tax code change like this in more than three decades since the Reagan administration.
The biggest changes
The vast majority of the new rules are subtle and likely had no effect on most taxpayers. However, there were many alterations that prompted discussions throughout the year. Key of these was the standard deduction increase which the tax attorney in Brentwood explains nearly doubled for many taxpayers. This was beneficial in that it allowed people to take a larger standard deduction compared to their 2017 itemized deductions. While this was mostly viewed as positive, hundreds of thousands of taxpayers also saw their dependent exemption disappear.
Refunds were not necessarily bigger
A hot topic of conversation from January through April was refund amounts. They were not necessarily higher than for 2017. This caused quite a stir in people expecting a large payout come April 15. What many people did not take into account, says the tax attorney in Brentwood, was that the amount of money they received on each paycheck was likely higher. This was true for the majority of low- and-middle income taxpayers although those with no dependents or that live in states with high tax rates may have actually wound up owing more than in previous years.
Preparing for the year ahead
There is no doubt that tax reform will continue to impact personal and business taxes. With this in mind, Boyd suggests that taxpayers hold onto their documents, receipts, and tax bills so these items are handy when it is time to file for 2019. According to the tax attorney, Brentwood taxpayers should know that it is never too early to prepare for the upcoming tax season. He asserts that now is the perfect time to get familiar with federal tax code but cautions that changes may still be coming. Although the government is back in full swing, the recent shutdown has no doubt left stacks of paperwork untouched at the IRS, and there are likely at least a few minor tweaks and technical corrections yet to come.
Taxes are an ever-evolving beast, and one that Brian T. Boyd says is best tamed with knowledge. He recommends partnering with a qualified accountant to ensure your taxes are done correctly and so that you aren’t blindsided by additional changes in the coming years.