Did you know that you could have more money in your pocket right now? That’s right. Because when it comes to taxes, tax credits and deductions have a huge impact under the Tax Cuts and Jobs Act (TCJA). They can reduce or offset the taxes that you owe.
5 DEDUCTIONS AND CREDITS TO REDUCE YOUR TAXES UNDER TCJA
According to the most recent IRS and a Wolters Kluwer report, here is the impact that the TCJA will have for 2018.
- Standard Deductions: This is the largest deduction in terms of total dollars claimed by taxpayers. For 2018, the standard deduction is doubling under the TCJA passed at the end of last year. In fact, an expected three-fourths of all taxpayers will be claiming it.
- Charitable Contributions Deductions: Fewer taxpayers may claim the charitable contributions deduction under that TCJA. That’s because of the increase in the standard deduction. However, taxpayers that do, may claim more with the increase in the deduction limit from 50 percent to 60 percent of AGI.
- State and Local Taxes Deductions: The size of state and local tax deductions are expected to be greatly reduced due to the new $10K limit on the deduction under the TCJA. Also, fewer taxpayers are itemizing deductions due to the greater standard deduction.
- Home Mortgage Interest Deductions: The home mortgage interest deduction may go down due to the increased standard deduction. Also, the new $750,000 limit on home mortgage principal will have effects.
- Earned Income Tax Credits: There were no major changes made to the Earned Income Tax Credit under the TCJA.
For more information, please call (800) 236-6519. You can also find out more at EngineeredTaxServices.com.