The last year has seen one of the biggest changes to the tax code in recent history, leaving many filers (and some tax preparers) unsure of what to expect this year. Fortunately, most of the changes are quite specific and actually make it a little easier for most filers to get their taxes in on time. If you’re worried, though, it might be a good idea to figure out what to expect.
The Big Changes
The biggest change this year comes in the Standard Deduction. Up over eleven thousand dollars from the previous year, the increased Standard Deduction makes it far more attractive to avoid itemizing this year. The maximum child credit has jumped up as well, moving up from a maximum of one thousand dollars to a maximum of two thousand dollars.
Not all the changes are beneficial, though. The extra-sized credits seek to make up for the fact that the Dependent Exemptions have been dropped, theoretically lowering the tax refunds for families with several children. State and local tax deductions have likewise been significantly reduced, putting a little more pressure on those who live in states with high taxes. Several other exemptions, including past-year businesses losses, moving costs, tornado damage, and even job search expenses have been eliminated from the deductible table.
When Should You File?
Fortunately, very little changed in regards to the timing of tax filing. Tax season officially opened up on January 28th, with the first refunds expected back in about three weeks. If you’re claiming a dependent credit or if you are a recipient of the EITC, you won’t be able to get a refund back until after February 15th. As ever, the last day of tax season is on April 15th, so make sure to get your forms in before that date in order to avoid any penalties.
The vast majority of filers won’t see many changes during this tax season. Business owners, families with multiple children, and those who typically itemize their deductions are likely to see the biggest changes. No matter what category you fall into, though, it’s always better to file earlier than to file later. Make sure that you gather up all of your pertinent information before you file, though, so that you can be sure to figure out if any of the changes to the tax code will impact you or your family this year.