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If you pay quarterly estimated tax payments, you may want to revisit the amount you pay.
The Tax Cuts and Jobs Act changed the way most taxpayers calculate their tax. These taxpayers include those with substantial income not subject to withholding, such as small business owners and self-employed individuals. The tax reform changes include:
The new tax law, effective after 2017, and how it affects Charitable Contributions and Medical Expenses:
Charitable Contributions
- The 50% limitation under Code Sec. 170(b) for an individual’s cash contributions to public charities and certain private foundations is increased to 60% for cash contributions made in 2018 through 2015.
What changed?
- The new law increases the child tax credit from $1,000 to $2,000.
- Eligibility factors for the credit have not changed. As in past years, a taxpayer can claim the credit if all of these apply:
• the child was younger than 17 at the end of the tax year
• the taxpayer claims the child as a dependent
• the child lives with the taxpayer for at least six months of the year
One of the changes brought about by Tax Reform legislation passed in December 2017 allows businesses to write off most depreciable business assets in the year they place them in service.
The 100% depreciation deduction generally applies to depreciable business assets with a recovery period of 20 years or less and certain other property. Machinery, equipment, computers, appliances and furniture generally qualify.
If you have been itemizing deductions on your 1040, you may be affected by changes from the Tax Cuts and Jobs Act. You should take a few minutes to use the IRS Withholding Calculator to make sure your employer is withholding the appropriate amount of tax from your paychecks for your financial situation.