What’s New This Tax Season?
Yes, it’s that happy time of the year when we crunch numbers, dig up old receipts, sweat a little and then send our yearly financial summary off to be graded by the IRS. So what changes are in store this year?
As with every new tax year, there will be incremental increases in the standard deduction and personal exemption amounts. This article from Forbes provides a good summary of the new numbers for 2018.
So what else is happening beyond these annual changes?
The tuition and fees deduction will disappear. Previously you were able to claim this deduction as a subtraction to income even if you weren’t able to itemize. The American Opportunity Tax Credit and the Lifelong Learning Tax Credit, two other popular deductions, will remain the same.
Another change is to the Earned Income Tax Credit. While this credit hasn’t been eliminated by any means, it may be a little more difficult to claim. In an effort to crack down on fraud, the new PATH Act prevents the IRS from sending out refunds before February 15th to anyone claiming the credit.
Indebtedness related to home foreclosure will also look a little different. Due to the housing crisis about a decade ago, taxpayers were able to discharge up to $2 million dollars of indebtedness. That will no longer be an option starting with your 2017 tax return.
For more information on these changes, as well as for general tax questions, you can visit the IRS website. As always, if you have concerns, please consult a qualified tax professional before filing your return.