Largest tax overhaul since 1986 promises relief

BONNERS FERRY — Big changes are happening with taxpayers this year. The Tax Cuts and Jobs Act, being credited to President Donald Trump, has been in place since Jan. 1, 2018. It will affect most taxpayers for this year’s filings and the 2019 tax year.

Business Insider writer Tanza Loundenback explained the tax bracketing in the new law basically as follows: there are mandated, new income tax brackets now; seven in total, and all seven are adjusted to accommodate inflation for every year going forward. The new tax brackets apply to income earned in 2020.

Chief Tax Officer and Intuit Executive Director David Williams described the tax legislation as the largest tax reformation in more than 30 years.

Some of the changes also contain significant tax relief benefits to categories of taxpayers for this year’s filing.

People who were unable to pay for health insurance after Dec. 31, 2018, will not be penalized, and the penalization for not carrying health insurance has been further eliminated.

The child tax credit has been doubled with this new law; whereas, in the past, a taxpayer was given a tax credit of $1,000 per child, now they are able to deduct $2,000 per child with the new reformation legislation.

Another exciting change concerns the standard deduction.

The standard deduction amounts that taxpayers enjoyed in the past has now been doubled. Single people who used to get a $6,350 deduction in 2017, now are able to deduct $12,200 for 2019’s filing, and married couples who file their taxes jointly will realize an increase from $12,700 to $24,000.

Williams wrote, “These increases mean that fewer people will have to itemize.”

Less itemization should translate to less frustration when completing taxes.

Taxpayers may opt to hire a tax professional this year to help navigate the changes and get the most out of their returns — or at least pay less than usual.

The Accreditation Council for Accountancy and Taxation presented the following reasons why taxpayers may want to hire a pro: it can save you money, it saves you time, the tax code is very complicated, you gain peace of mind, can help eliminate errors and costly mistakes, your previous returns can be reviewed, and you reduce the risk of an IRS audit.

Whether taxpayers utilize a local tax professional, of which there are a few in Boundary County to help, or whether taxpayers do it on their own, it is time to think about getting items in order to file, as time moves quickly toward the tax day deadline of April 15.