Tax reform is here … how will it affect you in the upcoming tax season? About 42% of surveyed taxpayers don’t know if the new tax law will benefit them. EPB Employees Credit Union is here to help, providing you with information about the new tax laws and keeping you up to date.
Here are three of the most important changes:
1. Your Tax Bracket Might Have Changed
The seven tax brackets found in the former law remain, but a number of tax rates are lower. The income thresholds at which the rates apply also change. That means you can decrease your tax burden with deductions that place you in a lower tax bracket.
2. Families Find Relief
This most recent tax reform effort doubled the Child Tax Credit from $1,000 to $2,000. If you’re saving for your kids’ education via a 529 plan, this creates an opportunity to increase your contribution — tax-free — without trying to find those funds in your current budget.
3. Some Eliminations and Deductions Fade
Contrary to the interpretation of some people, the tax reform change did not immediately do away with the tax penalty that accompanies non-participation in a health plan. Since the window for such participation is now closed, if you find yourself outside of a plan looking in on tax penalties, your best bet is to determine a payment strategy.