One of the major issues of this presidential election – and many before that – was taxes. Now with the changing administration, many tax laws may be amended in various ways when the new administration officially takes over. It is important for taxpayers to understand how already-passed or potential new changes will affect them and their businesses.
Holding Tax Refunds
The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) was passed in late 2015 and will go into effect in 2017. Part of the law is intended to curb identity or fraud on tax returns and requires the IRS to hold refunds for anyone who claimed the Additional Child Tax Credit (ACTC) or the Earned Income Tax Credit (EITC) until at least February 15th. If you claim either of these credits and file early, do not count on any refund money to pay bills or other expenses due before February 15th.
Changes to Potential Deductions
Proposals made by the Trump administration indicate there will be an attempt to both cap itemized deductions and to raise the standard deduction. The cap on itemized deductions would be $100,000 for an individual and $200,000 for married couples. The standard deduction would be raised to $15,000 from $6,300 for individuals and to $30,000 from $12,600 for married couples. These changes in deductions can affect tax strategy for minimum liability, such as whether you should file together with your spouse or separately.
Some additional proposed changes also include the following:
- Raising gift limits
- Lesser tax penalties for retirement savings
- Eliminating investment taxes for certain filers
- Eliminating the federal estate tax
- Eliminating the alternative minimum tax
Consult with a Chicago Taxation Attorney for Help Today
The laws regarding taxes are regularly amended with new laws and requirements being passed and enacted. The best way to ensure you are in full compliance with the law and to plan ahead for any coming changes is to schedule a free tax consultation with a tax lawyer to discuss any concerns or questions. Please call Attorneys Tax Relief at 800-819-6866 for more information today.