The Tax Cuts and Jobs Act: How it Affects Individuals

         The new change to the Federal Tax code is the largest action to have taken place in the area of finance last 30 years. With that understanding, it can honestly be said that almost nothing will stay the same. Now would be a good time to learn the different details of what is in this law and what it will do.

          When filing a Tax Return, it has been a normal practice to deduct any State and Local Taxes (SALT) against the Federal Tax. This would mean a Taxpayer living in a state with Income Tax, such as California, could use their State Income, Sales, and Property Tax to pay a smaller Federal Tax amount. In essence, they would not have to pay these taxes twice. One of the largest changes to the Tax Code is in regard to this aspect of how Taxes are handled.

          Starting in 2018, these SALT deductions will still be allowed, but they will be limited to only $10,000. Any amount over this must be paid. This will more than likely increase the Federal Tax obligation of many Taxpayers in high tax states and localities. This is just a highlight of how the new Tax law changes the landscape for all of us. At Anthony Sykes & Co, we look forward to guiding you to be able to make the best choices for your financial circumstances.

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