Tax deduction refers to a reduction of the sum of your taxable income. Its purpose is basically to decrease your taxable income and as a result, reduce the amount of tax you owe the government. The Tax Cuts and Jobs Act in the United States have made several changes in the tax code, in which a massive part of the changes affected the year 2018 which is the return you will file this year 2019. There are several tax changes authorized by the new tax legislation that will affect all individual taxpayers in America. These changes are set to expire in 2025 if they do not get extended. Below is a rundown of the changes on tax deductions and exemptions you need to be aware of in 2019.
Tax Brackets
The Tax Cuts and Job Act lowered the United States tax rates. However, the rate stayed at a minimum of 10 percent for poverty-level Americans. In addition to this, the number of tax brackets remained at seven, and the income threshold increased to a higher tax bracket. Meaning, high tax brackets now only apply to the few Americans whose earnings are high.
Higher Standard Deduction
The standard deduction which is used by a majority of household in the U.S almost doubled. You as a taxpayer can select between using it or using itemized deductions. Itemizing deductions refer to subtracting your AGI (Adjusted Gross Income) from your entire tax deduction. Additionally, standard deductions are just a set amount you can choose to deduct. These two options are there to pick which one is more beneficial to you.
No More Obamacare Penalties (Starting 2019)
The Tax Cuts and Jobs Act eliminated the Obamacare penalty which was introduced to penalize people who did not have health insurance coverage. This mandate takes effect in tax years 2019 and beyond, so it is important to note that you may still be penalized when filing your 2019 tax returns in case you failed to acquire health coverage throughout the year 2018.
No More Personal Exemption
The treasured personal exemption was scrapped. Personal exemption refers to the income you can exclude from your taxable income yearly. Before this, Americans could not only claim one personal exemption for themselves but also their spouses and dependents. Lawmakers have simplified the tax code by combining standard deduction and a personal exemption into a higher standard deduction.
How a Tax Attorney Can Help
Most people living in America are still unaware of the tax deductions and exemptions to look out for in 2019. They might find themselves falling victim of tax-related offenses or failing to claim what is rightfully theirs. This is why it is advisable to see an Austin, TX tax lawyer who will explain every new amendment and change in tax law as per the U.S Tax Cuts and Jobs Act. The Lawyer Referral Services of Central Texas (LRS) are endowed with some of the best law attorneys in the region and work to give the best services they can provide. Their tax lawyers are trained to offer the best counsel on tax law issues. When filing taxes, you may experience difficulties that may prevent you from completing the process. An Austin lawyer may help you sort out the following tax-related issues:
- State and local taxing
- Issues with embellished wages
- Problems with the Internal Revenue Service
- Representation when your company is under audit
- Understanding issues of filing state sales tax
The Internal Revenues Service usually provides detectives who come to assess the above problems. That is why seeking legal guidance from an Austin tax lawyer is essential during such investigations. The tax lawyer will get you prepared on what to expect and all that is required of you in the inquiry.
Austin LRS is there for you when you are having tax-related difficulties. They will help you find a tax attorney to explain to you the possible legal costs and answer your questions and doubts on proper ways of forwarding tax reports. In case you are having tax-related issues or need representation, find a Texas tax lawyer today.
Tax deduction refers to a reduction of the sum of your taxable income. Its purpose is basically to decrease your taxable income and as a result, reduce the amount of tax you owe the government. The Tax Cuts and Jobs Act in the United States have made several changes in the tax code, in which a massive part of the changes affected the year 2018 which is the return you will file this year 2019. There are several tax changes authorized by the new tax legislation that will affect all individual taxpayers in America. These changes are set to expire in 2025 if they do not get extended. Below is a rundown of the changes on tax deductions and exemptions you need to be aware of in 2019.
Tax Brackets
The Tax Cuts and Job Act lowered the United States tax rates. However, the rate stayed at a minimum of 10 percent for poverty-level Americans. In addition to this, the number of tax brackets remained at seven, and the income threshold increased to a higher tax bracket. Meaning, high tax brackets now only apply to the few Americans whose earnings are high.
Higher standard deduction
The standard deduction which is used by a majority of household in the U.S almost doubled. You as a taxpayer can select between using it or using itemized deductions. Itemizing deductions refer to subtracting your AGI (Adjusted Gross Income) from your entire tax deduction. Additionally, standard deductions are just a set amount you can choose to deduct. These two options are there to pick which one is more beneficial to you.
No More Obamacare Penalties (Starting 2019)
The Tax Cuts and Jobs Act eliminated the Obamacare penalty which was introduced to penalize people who did not have health insurance coverage. This mandate takes effect in tax years 2019 and beyond, so it is important to note that you may still be penalized when filing your 2019 tax returns in case you failed to acquire health coverage throughout the year 2018.
No More Personal Exemption
The treasured personal exemption was scrapped. Personal exemption refers to the income you can exclude from your taxable income yearly. Before this, Americans could not only claim one personal exemption for themselves but also their spouses and dependents. Lawmakers have simplified the tax code by combining standard deduction and a personal exemption into a higher standard deduction.
How a Tax Attorney Can Help
Most people living in America are still unaware of the tax deductions and exemptions to look out for in 2019. They might find themselves falling victim of tax-related offenses or failing to claim what is rightfully theirs. This is why it is advisable to see an Austin, TX tax lawyer who will explain every new amendment and change in tax law as per the U.S Tax Cuts and Jobs Act. The Lawyer Referral Services of Central Texas (LRS) are endowed with some of the best law attorneys in the region and work to give the best services they can provide. Their tax lawyers are trained to offer the best counsel on tax law issues. When filing taxes, you may experience difficulties that may prevent you from completing the process. An Austin lawyer may help you sort out the following tax-related issues:
- State and local taxing
- Issues with embellished wages
- Problems with the Internal Revenue Service
- Representation when your company is under audit
- Understanding issues of filing state sales tax
The Internal Revenues Service usually provides detectives who come to assess the above problems. That is why seeking legal guidance from an Austin tax lawyer is essential during such investigations. The tax lawyer will get you prepared on what to expect and all that is required of you in the inquiry.
Austin LRS is there for you when you are having tax-related difficulties. They will help you find a tax attorney to explain to you the possible legal costs and answer your questions and doubts on proper ways of forwarding tax reports. In case you are having tax-related issues or need representation, find a Texas lawyer today.
