All taxpaying citizens have the civic responsibility to know all about tax benefits adjustments. And so everyone has to know that the government has made inflation adjustments for the tax year 2018. The Internal Revenue Service (IRS) announced more than 50 revisions in the tax rules, which include tax charges and rate schedules. USA Today identified five tax adjustment examples that will affect taxpayers the most in 2018.
Tax Benefits Adjustments in 2018: What Are They
The IRS has already issued changes for deductions and exemptions on 2018 earnings that taxpayers will report on the nearly 155.5 million tax returns they’re expected to file in 2019.
The IRS changes are based on current federal law and are set based on economic and actuarial projections.
Based on the USA Today article, taxpayers need to know the following IRS tax adjustment examples the most:
- Standard deduction: increased to $13,000 (for couples with joint tax returns) and to $6,500 (for single individuals and couples with separate tax filings)
- Personal exemption: increased to $4,150 (exemption to phase out at $266,700 for single individuals and $320,000 for couples who file taxes jointly)
- Itemized deductions: limit for deduction begins with those earning $266,700 for single individuals and $320,000 for couples with joint filing
- Alternative minimum tax: $55,400 (exemption to phase out at $123,100) for single individuals; $86,200 (exemption to phase out at $164,100) for couples who file jointly
- Retirement plan limitations: annual contribution limit increased to $18,500
Part of Tax Reform Plan
The 2018 tax benefits adjustment came just in time when President Donald Trump lobbies hard on the passage of his tax reform proposal. The Trump administration claims that this plan would be the “most sweeping rewrite of the US tax code in decades.” His government believes this will benefit the US economy, as it will provide more jobs and income to the working and middle class citizens. The USA Today article reminded, however, that the fate of Trump’s tax reform proposal in Congress will definitely have an effect on the latest IRS tax adjustments.
Tax Preparation for 2019
IRS Warns It Has Not Announced 2018 Filing Season Start Date, Despite Rumors https://t.co/fBwWOo89Qt
— Global Tax Virginia (@globaltaxes) November 22, 2017
Just a reminder: these figures will be applicable in the 2018 tax returns of taxpayers the following year. IRS has actually announced a lot of tax revisions apart from the tax adjustment examples mentioned above. To know all of them, you may check out all revised tax provisions for 2018 in this document provided by IRS.
Are you expecting to earn more sources of income or possessions by 2018? Or, are you planning to get married next year? These circumstances will definitely affect your tax benefits based on latest IRS tax provisions. In this case, Forbes recommends adjusting or tweaking your estimated tax payments.
Get to know more about the latest adjustments of IRS in tax-related provisions in this video by RandomTopicsWithHumor:
Do you think these tax adjustment examples will affect you as a taxpayer in 2018? Share us your thoughts in the comments section below.