CPA Matt Bryant discussed some of the tax changes for 2018 that could help you save money when you go to file your tax return Monday during News 8 at Sunrise.
Bryant said a change that effects most taxpayers is an increase in the standard deduction. “Taxpayers are allowed to take either itemized deductions which include real estates taxes and mortgage interest or the standard deduction which is a fixed amount based upon your filing status,” he said. In 2018, the standard deduction will increase $150 to $6,500 for single filers and by $300 to $13,000 for married filing jointly. “The standard deduction is available to all taxpayers, and it’s good practice to take whatever gives you a bigger deduction, itemize or standard.”
The personal exemption will also increase by $100 to $4,150 in 2018. “Taxpayers will receive the personal exemption for each dependent that they claim on their income tax return,” Bryant said. “The total number of personal exemptions and deductions is subtracted from adjusted gross income to help reduce one’s taxable income.”
Bryant said the maximum an individual can contribute to a 401k retirement savings plan will increase by $500 in 2018 to $18,500. There will also be an increase in the phase out ranges for IRA contributions by $1,000 for single filers and by $2,000 for married filing jointly.
The exemption from Alternative Minimum Tax will increase by $1,100 single filers and $1,700 for married filing jointly.
The maximum Earned Income Tax Credit for a family with three or more children will increase by $126 in 2018.
Bryant said a trusted certified public accountant can be a great resource to help plan for retirement and minimize your income tax liability. For more information, visit the New York State Society of CPAs website, click here.