WEST SPRINGFIELD, Mass. (WWLP) – Changes in federal tax law are likely to impact higher-income people the most.
The recent government shutdown has delayed tax filing until the end of January, but with people already getting their documents ready, there’s some changes you should know about.
When it comes to federal tax law, higher income people will feel the impact. 22News visited the professional tax preparers of Pignatare and Sagan to find out what’s changed.
“If they’re making over $300,000 they’ll be losing some of their exemptions and getting their itemized deductions phased out. If they’re making over $110,000, they’ll lose child care tax credits,” said Andy Pignatare.
For people earning more than $200,000 a year, you’ll see an additional .9% Medicare tax to help pay for healthcare reform.
A healthcare tax credit will be harder to get. Healthcare expenses now have to be more than 10% of your adjusted gross income, up from 7.5%.
With all the complexities in tax law, It’s a good idea to get your taxes done by either a professional, or use a computer software. It can minimize errors, and even boost your refund.
“I only did my own taxes when I was much younger and I just had to use the short form, but once you get married and you accumulate things, I think it’s just better if you go with an accountant,” said Jane Barker of Springfield.
However, not everybody agrees. Beth Reynolds of West Springfield told 22News, “I just find that it’s easier to do it by paper. I know it’s old fashioned but I enjoy it. I feel it’s a little bit safer and a little bit easier.”
This year will likely be the last year for many credits and deductions. Like education, teacher expenses, and energy.
Same sex couples will also be impacted by changes. Many may be hit by the marriage penalty, especially if both spouses are employed.