Tax Reform Updates: Staying Informed About Changes in Tax Laws
The 2017 Tax Reform Act made sweeping changes to the federal tax code. With these changes, it is more important than ever to make sure you stay up to date on the latest developments in tax law. This guide will provide you with all the information you need to stay informed on changes to tax laws and how they may impact you.
This guide will cover the following topics:
- Overview of Tax Reform
- Impact of Tax Reform
- How to Stay Informed
- Federal Tax Updates
- State Tax Updates
- When to Contact a Professional
- Final Thoughts
With the right knowledge and resources, you can make sure you are taking advantage of the new tax laws while remaining compliant with all regulations. Read on to learn more.
Overview of Tax Reform
The 2017 Tax Reform Act passed in December of that year, and was the biggest tax overhaul in over 30 years. This Act changed the way taxes are collected and reported by individuals, businesses, and corporations. There are a few key provisions that need to be taken into account when staying informed on the current changes in tax law.
- The bill lowered the corporate tax rate from 35% to 21%.
- It doubled the standard deduction for both single taxpayers and married couples.
- State & local tax (SALT) deductions are now capped at $10,000.
- The bill allows some business owners to deduct 20% of their pass-through income from their taxes.
- Taxpayers can no longer deduct business entertainment expenses from their taxes.
The 2017 Tax Reform Act also included other changes such as adjustments to the estate tax, new rules for foreign income, and changes to charitable donations. It is important to understand the implications of these changes to ensure you are filing correctly and maximize your tax savings.
Impact of Tax Reform
The 2017 Tax Reform Act (TRC) significantly impacted how individuals and businesses are taxed in the United States. The changes are extensive and affect many different areas, including income taxes, deductions, and credits. It’s important to understand how the TRC is impacting taxpayers, so let’s take a look at the key provisions and guidelines.
Individuals
Individuals will be most affected by the TRC in terms of their income taxes. The new law generally reduced income tax rates across all income levels. Additionally, the standard deduction almost doubled, meaning that many individuals may take this deduction instead of itemizing deductions. The child tax credit also nearly doubled, and there are new credits available for other dependents. Ultimately, most individuals will pay lower taxes under the new law.
Businesses
The TRC also contains many changes relevant to businesses. One of the most notable changes is the new flat 21% corporate tax rate, which was previously 35%. Additionally, certain types of businesses now have the option to use a 20% deduction when calculating their taxable income. Finally, the new law includes a modified version of the alternative minimum tax and changes to the rules for deductibility of business expenses.
Conclusion
It’s clear that the 2017 Tax Reform Act has had a considerable impact on both individual and businesses taxpayers. It’s critical to stay informed on the changes in order to take advantage of deductions and credits, as well as avoid any potential penalties. We will now focus on how to stay abreast of tax reform updates.
How to Stay Informed about Tax Reform Updates
Staying informed on the current changes in tax law is essential for all taxpayers. Knowing what has changed and how it affects each individual can save time and money when it comes to filing taxes.
Fortunately, there are plenty of ways to stay informed on tax reform updates. Here are some key resources that can help you stay up-to-date:
- Internal Revenue Service (IRS) website: The IRS provides updated information on the latest tax changes and requirements. Using this website is a great way to ensure you have the most accurate information.
- Industry publications: Many publications provide updates on new tax laws. Reading these regularly helps keep you ahead of potential changes which may affect your taxes.
- Tax preparers: Most tax preparers are knowledgeable about the latest changes and can provide insight into how they affect your taxes.
- CPA’s: Certified Public Accountants (CPAs) can provide valuable advice and guidance when it comes to understanding complex tax regulations.
Staying informed on tax reforms is key in order to be sure that no important information or changes are missed. By utilizing the above resources, taxpayers will feel confident in their knowledge of any changes in tax law so that they can take the appropriate steps to remain in compliance.
Federal Tax Updates
The federal government updates their taxes each year, making it important to stay informed of any changes. Federal taxes are paid each year with the filing of taxes in the spring and can affect both individuals and businesses. There are specific forms that must be filled out, as well as guidelines and rules that must be followed.
It is important to pay attention to the details when it comes to filing taxes as there can be serious consequences for non-compliance. The IRS is the official source for federal tax forms and regulations so this would be the best place to start to stay informed. Other sources of information on changes in federal taxes include newspapers, magazines, and radio/television.
The most important changes to federal taxes each year involve filing deadlines, forms needed and changes in deductions. Millions of taxpayers use the standard deduction each year, and this is often impacted by revisions in the tax code. Also, there are always certain forms that need to be filed depending on the taxpayer’s individual circumstances (for example, filing jointly or separately).
Finally, different categories of taxpayers should be aware of the changes to their respective taxes. For example, business owners should know about changes to corporate taxes and self-employed individuals should note any modifications in taxes for freelance work. Being proactive and staying informed can save time and money in the long run, so be sure to keep up with the latest tax laws.
State Tax Updates
Staying on top of updates to state taxes is an important part of filing accurate income taxes. Changes in state taxes, such as state income tax or sales tax rates, can vary from year to year. To ensure accuracy when filing, it’s important to double check the current tax laws for each state.
When it comes to income tax, different states have different systems. Some states, such as Tennessee and New Hampshire, have no state income tax. While other states, like California, have a progressive system where the more money made, the higher the rate of income tax. The best thing to do is to keep updated on how your specific state handles income tax, as it may change from year to year.
Sales tax also varies from state to state. Some states have local taxes as well as state taxes. Depending on the state, these taxes are either calculated based on the price of an item or the rate of the item. States often update their sales tax laws at the start of the year, so be sure to check the latest news about your state.
States also offer various deductions and credits to reduce your taxes. These deductions and credits can vary from year to year and from state to state, so be sure to familiarize yourself with the changes. Knowing the current tax code may help you save a significant amount of money when filing.
When to Contact a Professional
Tax laws are constantly changing, and staying up-to-date can be difficult for the average taxpayer. In some situations, it can be helpful to consult a licensed tax professional for more personalized advice and guidance. There are certain times when talking to a professional can be beneficial:
- If you have complex investments or business activities that need to be reported on your taxes.
- If you have recently undergone any life changes, such as marriage, divorce, or birth of a child.
- If you are having difficulty understanding tax returns or forms.
- If you need help with planning for retirement or estate planning.
When it comes to finding a qualified tax professional, there are a few options. Your family or friends may be able to provide recommendations for experienced tax preparers in your area. You could also search trusted review sites or contact your local Better Business Bureau. Finally, your local library or IRS office may provide referrals to recommended tax professionals.
Final Thoughts
Tax laws and regulations, like any subject, require frequent updates that can be difficult to keep track of. It is important for taxpayers to be informed of any changes to the tax code, as failure to do so could result in substantial penalties or fees. To help readers stay up-to-date on the ever-changing tax environment, this guide outlined the tax reforms implemented in 2017, explained its impacts, and offered resources for staying apprised of new developments. Ultimately, it is essential that taxpayers pay attention to the news and make an effort to understand the implications of upcoming changes to get the most out of their taxes.
Above all else, remember that tax law is often complex and seeking professional advice is often the wisest decision when major changes are taking place. Consider using a certified public accountant or another qualified professional to avoid any liabilities or headaches that may arise. With these tips and suggestions, readers should now be better prepared to navigate any changes in the tax code.
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