Tax Changes you Should Know for 2018 Returns
Every year, you have to file tax returns and every year there are changes to the tax code .
Here are some key changes for 2018 to keep in mind when you prepare returns .
Tax Changes you Should Know for 2018 Returns
2018 was a fairly quite year when it came to changes to the tax code .
Most changes were in the form of tweaks, instead of major overhauls .
This break seems to have given the IRS a change to clean up some of its procedures as it has started simplifying forms .
Nonetheless, here are changes to keep in mind when preparing your tax returns.
1 .
Donations of automobiles to charities are being treated differently from 2018 forward .
If you donated a car to charity in 2018, you may be in for a minor shock .
Instead of claiming fair market value, the deduction for the donation is now limited to the actual gross payment received by the charity when auctioning off the automobile .
The charity you donated to should have sent you correspondence indicating the amount in question .
If they did not, contact them to get one so you know what you can deduct.
2 .
The business mileage allowance is a two-tier system for the 2018 tax year .
For business miles incurred during the first eight months of the year, the deduction is 40.5 cents a mile .
For the last four months of 2018, the deduction is a whopping 48.5 cents a mile .
This odd use of two calculations is due to the explosion in gass prices in 2018 .
3 .
In a positive development, the exemption amount on your tax returns has gone up .
For each exemption, you can now deduct a hefty $3,200 per exemption .
Keep in mind, however, that exemptions are graduated per your adjusted gross earnings .
The more you make, the less of an exemption you can claim .
The specific graduated percentages depend on your filing status, so you’ll have to take a look at the tax tables to ascertain the impact on your tax filings.
4 .
The standard deduction that can be claimed by those who do not itemize has gone up .
Again, it depends on your filing status, so make sure you take a close look at the numbers on whatever version of form 1040 you are using this year .
5 .
The earned income tax credit assists low income taxpayers by cutting the amount of taxes that have to be paid .
To claim the tax credit, you have to be earning under a certain amount .
This amount has increased for the 2018 tax year .
You’ll have to look at your tax form to get the specific amount as it varies pursuant to your filing status and the number of children you are claiming .
6 .
If you lived in any area devastated by Hurricane Katrina, the IRS is giving out major concessions to help alleviate any tax problems .
Go to the IRS web site to learn more .
As you can see, the tax changes for 2018 aren’t particularly significant .
Still, you need to know them when you file.
Every year, you have to file tax returns and every year there are changes to the tax code .
Here are some key changes for 2018 to keep in mind when you prepare returns .
Tax Changes you Should Know for 2018 Returns
2018 was a fairly quite year when it came to changes to the tax code .
Most changes were in the form of tweaks, instead of major overhauls .
This break seems to have given the IRS a change to clean up some of its procedures as it has started simplifying forms .
Nonetheless, here are changes to keep in mind when preparing your tax returns.
1 .
Donations of automobiles to charities are being treated differently from 2018 forward .
If you donated a car to charity in 2018, you may be in for a minor shock .
Instead of claiming fair market value, the deduction for the donation is now limited to the actual gross payment received by the charity when auctioning off the automobile .
The charity you donated to should have sent you correspondence indicating the amount in question .
If they did not, contact them to get one so you know what you can deduct.
2 .
The business mileage allowance is a two-tier system for the 2018 tax year .
For business miles incurred during the first eight months of the year, the deduction is 40.5 cents a mile .
For the last four months of 2018, the deduction is a whopping 48.5 cents a mile .
This odd use of two calculations is due to the explosion in gass prices in 2018 .
3 .
In a positive development, the exemption amount on your tax returns has gone up .
For each exemption, you can now deduct a hefty $3,200 per exemption .
Keep in mind, however, that exemptions are graduated per your adjusted gross earnings .
The more you make, the less of an exemption you can claim .
The specific graduated percentages depend on your filing status, so you’ll have to take a look at the tax tables to ascertain the impact on your tax filings.
4 .
The standard deduction that can be claimed by those who do not itemize has gone up .
Again, it depends on your filing status, so make sure you take a close look at the numbers on whatever version of form 1040 you are using this year .
5 .
The earned income tax credit assists low income taxpayers by cutting the amount of taxes that have to be paid .
To claim the tax credit, you have to be earning under a certain amount .
This amount has increased for the 2018 tax year .
You’ll have to look at your tax form to get the specific amount as it varies pursuant to your filing status and the number of children you are claiming .
6 .
If you lived in any area devastated by Hurricane Katrina, the IRS is giving out major concessions to help alleviate any tax problems .
Go to the IRS web site to learn more .
As you can see, the tax changes for 2018 aren’t particularly significant .
Still, you need to know them when you file.
Tax Changes You Should Know For 2005 Returns
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Reviewed by Henda Yesti
on
June 29, 2018
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