Taking Control of Your Taxes in 2018
Happy New Years! As always, the start of a new year means the nearing of another tax season. The tax season is always intimidating, but with the right help, you can get through it without a sweat! From Lucia CPA to you, we want to let you in on a few highlights regarding the new tax laws, and some tips and tricks to get the biggest tax return available to you before the 2018 tax deadline on April 17, 2018.
Take Control of Your Taxes in 2018 –
- Understanding the New Tax Laws
- 3 Simple Ways to Get Ahead of This Year’s Tax Return
- Work with the Best Certified Tax Professionals
Understanding the New Tax Laws
2017 is over. That means all taxes for last year are locked, and by the end of January your employer will have sent out your W-2 tax form. It also means new tax laws have gone into effect, and being knowledgeable of them early can help you be mindful of your taxes so you can get a head start on your tax filing in 2019. Here’s a quick breakdown of what you got to look forward to this year.
For starters, the new tax bracket affects nearly all of the working class. There are seven new income tax brackets: 10 percent, 12 percent, 22, percent, 24 percent, 32 percent, 35 percent and 37 percent. The new deduction limits on all income tax brackets are rewarding, and induces more people to take the standard deduction rather than itemizing items such as donations and property taxes. It also means changes to the tax bracket may lead to you filing a new W-4 tax form with your employer to adjust payroll withholdings, so you can get more of your money throughout the year. At the end of 2018, you can be looking at a bigger tax refund than what you may earn this tax season.
New tax laws also promote medical attention. Make 2018 the year you visit your doctors on multiple occasions for a checkup, even if you aren’t sick. This year only, you can deduct your out-of-pocket medical expenses that exceed 7.5% of your adjusted gross income, coming down from the regular 10% that will resume in 2019.
However, the new tax laws no longer allow for deductions involving moving expenses (unless you’re an active military personnel). So, if you must move residencies for employment, now’s the time to polish your negotiation skills and see if your employer will cover some or all your moving costs.
Keep in mind that these recent favorable tax changes go into effect this year as part of the Tax Cuts and Jobs Act, and won’t affect your tax filing for this tax season ending on April 17, 2018. Hopefully, with an early start, you’ll be able to take advantage of the latest changes and use them to get an even bigger tax deduction during next year’s tax season. For more information and insight knowledge on the new tax changes, feel free to get in touch any time with one of many certified tax professionals here at Lucia CPA.
3 Simple Ways to Get Ahead of This Year’s Tax Return
The new tax laws look promising, but we’re here now to look at this year’s tax season and what you got to do when filing to get the biggest tax refund possible. Here’s some of the biggest tips we have for you to get the greatest tax deduction, and greatest refund available to you.
Your Refund May Differ Based on Your Filing Status
Most married couples do file together, but a joint return may not always be the way to get the biggest tax refund. Here’s a couple examples as to when it’s a better idea to file individually.
The IRS takes a percentage of your adjusted gross income to decide whether medical expenses are deductible. For 2017, medical expenses that cost 10% or more of your adjusted gross income pass the measure. Filing jointly may decrease the cost percentage for the medical expenses and may bar you from any medical deductions.
Another example is when a spouse travels on the road or in the air a lot for business, resulting in travel expenses. Filing individually can increase the deductions for business travel. Or when a spouse is unemployed for an extended time and is looking for work, they can take a sleeping miscellaneous deduction available to individuals that reduces taxable income.
While filing separately has its benefits, there’s a reason 96% of married couples filing jointly every year. Filing separately will lose you credits that are only available to joint filers. That’s why, when it comes to preparing your taxes and seeing which filing status will result in a bigger tax refund, consult a tax professional at Lucia CPA.
Maximize Your IRA Contributions
April 15, 2018 is the cutoff for opening a traditional IRA that’ll be a part of your tax portfolio for this tax season. Opening one will allow you to claim its credit on your return. What you spent to open an IRA is recoverable through your tax return. The bright side of opening an IRA is the money you’re saving for when you plan on retiring. Traditional IRA contributions reduces your taxable income, so getting an IRA at an early age will earn you bigger tax refunds throughout your entire life.
As a side note, if you’re at least 50 years old, contributing to a Roth IRA will qualify you for a retirement savings credit and will lower your taxable income, resulting in a larger tax refund.
Take Advantage of Tax Credits
Tax credits come and go, so taking advantage of them now means everything for a bigger tax refund this tax season. When you’re filing, be sure to claim the Earned Income Tax Credit if you qualify. That’s a big tax credit that’ll boost your refund tremendously.
Other tax credits that you need to be aware of are the American Opportunity Tax Credit and Lifetime Learning Credit. Both credits encourage further education, and the refund you get out of them can go towards paying down debt faster and limit any compounding interest.
Work with the Best Certified Tax Professionals
To get through this year’s tax season, it’s never a bad idea to seek help from a tax professional. At Lucia CPA, we make sure that we’re up-to-date on all tax code changes and find any tax credits and deductions you’re applicable for. Working with a team of professionals compared to a tax software means you have a personal team to help you stay organized about your taxes and expenses throughout the year, and use them to maximize your tax refund every year.
What’s more, at Lucia CPA we can review previous year’s tax returns (up to 3 years) and see if there are any possible errors or amendments that, once resolved, can help you get the refund you earned!
At Lucia CPA, we’re not you’re ordinary bean counters. When your W-2 comes in from your employers, visit one of our offices, or take the time to schedule a Free Consultation using our online contact form or by calling us at (800) 614-0139. Make 2018 the year you take control of your taxes!
Trackback from your site.