The fear-mongering headlines regarding recent tax law changes have been daunting to many. Since the Tax Cuts and Job Acts (TCJA) was implemented, we’ve heard how the average American’s tax refunds have been lower. We’ve read about people who are used to getting a refund and yet owe thousands this year. These are just a few examples. The truth is, there are far too many variables involved in tax preparation to compare your particular situation to any of the articles you may have read. This applies to the positive and the negative.
One great benefit from President Trump’s Tax Reform is the 20% pass-through tax deduction for the self-employed! What this means for many is that those who are self-employed, independent contractors, freelancers, etc. will not have to pay Federal income tax on the first 20% of their income. This is huge for small businesses and all self-employed earners in the United States! With nearly 15 million Americans being self-employed, this is benefiting around 10% of the population.
As with all tax law changes, it’s important to discuss the particulars with your tax professionals. Be sure to add this to your list of questions during your next appointment. Again, there are too many variables to compare your situation to someone else’s. Reach out to a qualified Tax professional and feel confident in filing your 2018 tax return.
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