Tax deductions and credits are terms often used together when talking about taxes. While you probably know that they can lower your tax liability, you might wonder about the difference between the two.
The Tax Cuts and Jobs Act, signed into law in December 2017, approximately doubled the federal gift and estate tax basic exclusion amount to $11.18 million in 2018 (adjusted for inflation in later years). After 2025, the exclusion is scheduled to revert to its pre-2018 level and be cut approximately in half. Otherwise, federal gift and estate taxes remain the same.
Buying a home can be a significant purchase. Fortunately, federal tax benefits are still available, even after recent tax reform legislation, to help make homeownership more affordable. There may also be tax benefits under state law.
Initial drafts of the Tax Cuts and Jobs Act of 2017 included several changes to college-related taxation. In the end, none of these provisions made it into the final legislation. But a few other college-related items did. These changes are now taking effect in 2018.
When tax season comes around, it can be difficult to tell if you are in need of a professional to prepare your tax return, especially with the way the tax filing process has changed significantly. To decide, ask yourself five easy questions.