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Lots of tax changes to ring in the new year

On Behalf of | Jan 4, 2019 | IRS

With the Tax Cuts and Jobs Act taking effect, 2019 is going to mean a lot of changes to the way people report, calculate, and pay their federal income taxes. Some of these changes will affect a broad range of people, while others may affect residents of the Chicago area in certain situations, such as those who hold multiple properties.

No matter what one’s financial background and circumstances are, however, it is important for everyone to keep these changes in mind as they prepare to file returns this year and start the planning process for the years to come. This will enable them to save tax dollars and, in some cases, avoid trouble with the IRS.

Some of the easier changes to digest may well be the reduction and restructuring of most tax brackets. For many Americans, their marginal tax rate will be lower. Another relatively straightforward change is that Congress raised the so-called standard deduction considerably, although the exemptions one may have been accustomed to claiming have been abolished.

There are other changes that may have more bearing on property owners and others in more complicated tax situations. For instance, how one deducts mortgage interest and charitable contributions has changed, as has the treatment of so-called pass through income, that is, income one earns from a partnership, LLC or S-Corporation.

If an Illinois resident has questions about their legal rights and obligations under these new tax laws, including those that apply to corporations, they should consider speaking with an experienced attorney in Franklin or the surrounding area. Likewise, should they down the road find themselves facing scrutiny, perhaps because they did not fully understand the application of these new laws, legal options may be available to them.