Recently, we did a very informal poll about taxes outside our studio in Newark where we asked people whether or not they had filled their tax returns. Our results showed that most had not! If you’re like the majority of survey respondents, this brief primer from the NJCPA about the many changes in both federal and state tax law can help.
Here are some important changes in the federal tax law:
1. Standard deductions and exemptions:
The standard deduction has been almost doubled, and the personal exemption has been eliminated.
2. Tax brackets:
Most individual tax income tax brackets have been lowered.
3. Itemized deductions:
A number of deductions have been eliminated or limited, most noteworthy being the $10,000 cap on all state and local taxes, known as SALT.
And here are a few changes in the state tax law you should know about:
1. Property tax deduction:
While the federal tax return limits SALT deductions to $10,000, the New Jersey tax returns allows a deduction up to $15,000 for 2018.
2. Child and dependent care credit:
A new tax credit is available for eligible resident taxpayers who are allowed a federal credit for expenses they incur for the care of one or more qualifying individuals.
Remember, you have the opportunity to get your tax questions answered in the final part of our tax season Know Jersey: Finances web series. We’ll be live Wednesday, Feb. 27 at noon. You can submit your questions using the form below, or ask your question live during the show!