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New tax laws confusing taxpayers

On Behalf of | Jun 14, 2018 | Income Taxes

Many Georgia residents are trying to figure out how the new tax laws will impact their future returns. Many believe that it will be easier to file their taxes going forward. While there will be fewer people who itemize, those who continue to do so will likely find that their returns are no easier to file than they were in the past.

In addition, homeowners may be impacted by the fact that mortgage interest can only be deducted on $750,000 in debt. However, this is only true if a loan was taken out after December 2017. If a loan was taken out earlier than that, a homeowner can still take an interest deduction on up to $1 million in debt.

Taxpayers should also keep a close eye on their state tax obligations in the wake of changes to the federal tax code. A person who receives a tax break on the federal level may see his or her state taxes increase. This is because states have not necessarily made changes to their tax rates in the same way that the federal government has. It is expected that the states themselves may see increased revenues as a result.

As a general rule, the IRS expects taxpayers to fill out their returns accurately even if they aren’t sure what their obligations may be under the tax code. Those who are confused about how to claim or classify income on a return may benefit from consulting with a tax attorney. A CPA or enrolled agent may also be able to offer assistance. With proper help, a taxpayer can reduce the odds of an audit or other adjustments being made to a return.