CHARLOTTE, N.C. - Congress passed the changes in 2017, which went into effect last year. As you do your taxes, this year will be the first time you'll feel the difference.
Here are the differences experts said you'll notice while paying taxes this year:
The tax brackets have changed, and for most people, your taxes are lower.
Child Tax Credit
Child tax credits have doubled. You can now deduct $2,000 for every child under the age of 17.
In the past, getting married would cost you more. Not anymore. Combining incomes won’t hurt you unless you earn more than $400,000 together.
You may not want to itemize your deductions, as the standard deduction nearly doubled.
For example for single taxpayers, the total is now $12,000 and if you’re married and filing jointly the total is $24,000.
"For a lot of folks, those deductible items such as state income taxes, personal property taxes, charitable contributions, those types of things will no longer be deductible to them because they get a bigger standard deduction," financial advisor Kelly Graves said. "So, net-net, it's good for them, but they just don't see the benefit of those other things that are typical deductions."
In previous years, you could only deduct medical expenses which cost more than 10% of your adjusted gross income (AGI). Now you can deduct more. Anything over 7.5% of your AGI can be deducted.
"The lower floor means more possibility," Graves said.
If you’re investing in a 529 plan for your child’s college, you can now use that money for education other than college, such as tutoring or private school.
Home Equity Interest
You are no longer able to deduct the interest on home equity loans.
State and Local Taxes
You are still able to deduct state and local taxes, just not as much as before.
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