As the time to file your 2018 taxes looms closer, you may be feeling the stress of having to learn some of the new tax laws that were created and signed into law by the Trump Administration in 2017. Knowing whether to file jointly with your spouse or individually or how to claim medical expenses for the year can be confusing when new laws take effect. However, making a list of questions for your tax accountant before you submit your information can give you peace of mind that you are following the reform’s guidelines properly.
1. Are the New Laws Going To Benefit Me?
This question will likely be high on your list of priorities, as a hefty tax refund can help you catch up on bills or even help you put a down payment on that new vehicle you need. While there are many details in the reform that might benefit you, the size of your refund will probably depend on your individual status.
For example, if you file jointly with your spouse for 2018, you will be eligible for a greater standard deduction. The amount offered has increased from over $12,000 to 24,000, which can make a joint filing well worth your effort.
2. Are There Any Ways To Save on Medical Deductions?
In 2018, an independent medical report projected that a family of four would spend over $28,000 on medical costs for the year, with over 30 percent of those costs going to doctor visits and inpatient treatment. This can put a serious strain on your budget, especially if you have a large family; however, the new tax reform might offer you some relief.
In the past, medical expenses qualified for a deduction if the cost exceeded 10 percent of your gross income after adjustments. Under the new law, the threshold is only 7.5 percent, which may allow you to reach this cap, even if you spend less on medical expenses. Remember to ask your tax prep specialist about he or she calculates your gross income and whether it is possible for you to take advantage of this deduction.
3. Can I Deduct My Alimony Payments?
In the past, it was possible to deduct any alimony payments from your taxes, which likely gave you a larger refund. Trump’s tax reform has changed this, and if you are paying alimony, you might not be pleased with the new law.
When you file for 2018, you are no longer allowed to deduct any alimony payments, no matter the amount. Your ex-spouse can keep this source of income private, as it is no longer required that alimony recipients report the money on their taxes.
4. How Can I Benefit the Most From the Tax Reform?
The trump tax cuts 2019 mostly favor large businesses, which are seeing major tax cuts under the reform. However, there are also many breaks and new deductions for individuals with families. Sitting down with your personal accountant and reviewing your situation can be the best way to discover benefits both large and small.
Filing your taxes can become a confusing process when reforms and new laws are introduced. Asking the right questions and being aware of your status as a taxpayer might give you greater peace of mind when you submit your information to a tax preparation specialist.