This week, The Washington Post reported an alarming story with tax season approaching. It seems that the average tax refund for Americans has declined roughly 8% year over year.
On the surface, the Post framed this story about the 2018 tax cuts. The claim was that Americans were suffering because they received smaller refunds on average.
Of course, this story is nonsense. The reason refunds are smaller is that more Americans are keeping more of their money. Less money is being collected from their paychecks.
A refund is nothing more than the government giving you your money back. If anything, Americans should be outraged that they are giving the U.S. government an interest-free loan for up to 12 months a year.
While the Post‘s outrage is bogus, there is a critical factor that readers need to know…
The 2018 Tax Cuts and Jobs Act was the single biggest change to fiscal policy in three decades. It has created a lot of confusion, dramatically altered tax brackets, and altered deductions in radical ways.
Powerful Investment Income Stream: The Treasury is sitting on an $11.1 billion money pool. By adding your name to a special distribution list, you could begin collecting $1,795 or more every month. Get the details…
While filing taxes might be a bit of a headache for many Americans, the changes really benefit one stock that is poised to break out in the coming months.
Today, I’ll explain a few key changes that you need to know about in your taxes, and I’ll show you a stock to buy now that should surge due to demand for its services….
Big Changes This Tax Season Make One Stock a “Buy”
Tax compliance is a massive headache. But I want to highlight a few fundamental changes that will impact your money in the year ahead. (I have to do something this these degrees in fiscal policy and accounting, right?)
First, there are no longer personal and dependency exemptions. In the past, you could shelter $4,150 in pay from tax in 2018. For a family of four, that figure jumps to $16,600. But now, that money is exposed to taxation.
While that sounds bad, the second thing to know helps offset those worries. The standard deduction has increased from $13,000 for a married couple to $24,000. The increase in the standard deduction will significantly reduce the number of people who itemize their deductions.
Now, when it comes to itemized deductions, there are a few big ones to note. For example, state and local tax deductions are now capped at $10,000, which is going to hit people in high-tax states like New York, New Jersey, and California hard. The new law has fueled a massive departure of residents from these states to lower-tax locations like Florida and Texas.
Also, Americans can now only deduct mortgage interest on up to $750,000 of debt (married couples). A single person can deduct interest on the first $375,000 of mortgage debt.
Finally, it’s important to note that there are all new tax rates. There are now seven tax brackets that range from 10% up to 37%. It’s important to note that you only pay the rate on the money within the bracket. So, if you earn $550,000 a year, you’ll only pay 37% on the amount above the $500,000 threshold.
There are a lot of changes. And it’s important that you speak with a tax advisor to ensure that you aren’t exposed to an audit or additional charges.
It turns out that one of the nation’s top tax consultancies is also the stock that we’re recommending today…