MIND YOUR BIZNESS
Here's How the Tax Reform Plan
Could Affect You
Article by H&R Block
(BPT) - With the newly passed tax reform bill, the Tax Cuts and Jobs Act (TCJA), now is the time to start thinking about how this will affect you so that you can plan ahead for the outcomes you will start to feel in your paycheck as early as February 2018.
This tax reform affects virtually everyone; however, families, homeowners, residents of high-tax states, the medically uninsured and small businesses will be especially affected. Most taxpayers will experience changes that could reduce or increase their taxes owed. If you're not sure how this may affect you, here is a summary of possibilities.
Families
Like most taxpayers, many families will be affected by the loss of personal and dependent exemptions of $4,050 per person. However, families with income under $200,000 ($400,000 for joint filers) will be eligible for an increased child tax credit of $2,000. Those with income over that amount may be eligible for a smaller credit. This, along with larger standard deductions, may or may not make up for the loss of the personal exemption. Families with dependents over the age of 16 may also qualify for a new family tax
credit of $500 for each dependent who does not qualify for the child tax credit.
Homeowners and residents of high-tax states.
Homeowners and residents of high-tax states like California, New York and New Jersey, who typically itemize because they have large expenses like real estate taxes and state and local income taxes, may not be able to get the full tax benefit for these expenses, which are capped at $10,000. Some may not find it worthwhile to itemize going forward. Itemizing deductions is only worthwhile if all expenses exceed the standard deduction.
Medically uninsured.
Starting in 2019, there will no longer be a penalty for those without health insurance. The penalty, which had