Trump To Discuss Recent Tax Cuts During Session With Workers

With all the headlines around the new tax law, Congress passed at the end of last year, you might expect some big changes in your tax preparations. But most of the big tax law changes only took effect in January this year. And do not affect 2017 taxes, in fact this year may be a chance to say a fond farewell to some deductions and prepare for a new tax landscape credit joining me is rough ale chili know, with IRS media relations for Southern California. Rough ale, welcome back. >> Things were having me. I always enjoy being here. >> Am I right, or are there some new things in the tax law that do take effect in 2017? >> For the most part, for just about all of us, the legislation that was enacted before Christmas is for 2018 going forward. As you said, we will file that return a year from now in 2019. 2017, which we are filing for beginning this week going forward through April 17 this year, that is the deadline pretty much talking about pretty much the same, for the most part, the major changes being for the future. >> Not in the new tax law, but are there any changes that are coming up and that might catch people by surprise for their 2017 taxes? >> Nothing major off the top that you can think of. There were some extenders that Congress extends deductions and credits that tend to be cyclical. You want to renew them every year or every two year period that might be a separate piece of legislation that may or may not come out Brady want to be aware of those. Your software has all that information about what is current as we prepare now and what is in legislation, what is in the law for you based on your situation of course, but really the bottom line is -- there is no real major change for the 17 year. >> Now, there has been so much confusion over the affordable care act. The people still have to show proof of coverage this year? >> Yes. That was changed in the new law, and I believe that change takes effect after December 1 2018, but as I understand it, you still want to check the box indicating coverage. If you do not do that, it may be rejected. >> Are there still fines for not having? >> It is still -- yes, that is all still there. As before, if there are legitimate reasons -- there are a lot of them. There are all kinds of reasons why that are there that are granted by the IRS that are granted by healthcare HHS, that kind of a thing -- that is all there for you as well. >> Mentioned that there are some deductions that people have been taking for years, that they may have to say goodbye to this year, for instance -- states tax above $10,000. >> That is from 2018 going forward. >> And, there was a rush to prepay property taxes at the end of last year, will that benefit some taxpayers? >> The IRS put some guidance out on that. December 27 the law was enacted on the 22nd, and if you think about -- of the step back, that is a huge piece of legislation, that we have to immediately implement input guidance out there for. And that is not easy to do considering the breadth of that legislation, and what we have to do to administer it, but we did come out on the 27th, and basically says something to the effect of -- if it is assessed in the year, then you can put it on your return for 17, and deducted in that year, paid in that year, as a lot of people that all the way up until the 31st. That guidance is on IRS.gov and it is from December 27, the news release there with more information that I can tell you in terms of talking about it live on the radio. You know, but certainly it was a big part of things at the end of last year. >> And, this is the last return where you can take a deduction of a million-dollar home loan, isn't it? >> That's changed to 750. So, it is a loan for 750 and below from 1 million. That is beginning in 2018. >> In fact, will this be the last year that taxpayers find that it makes sense to even itemize their deductions? >> What happens -- the legislation to change things quite a bit. What you did was you did away with the personal exemption, you double the standard deduction, you are reducing the tax rates, but expanding them in terms of the width of those who fit in them. So there is a lot of change for a lot of folks that will find a change in their taxes because of that. That will be for 2018 going forward. So, what that means is you will probably get less people itemizing then you already do. The national average for itemizing on a schedule eight, which as we discussed earlier which is where state and local taxes go, is about 65% don't. So about 35%, maybe 30% to do itemize. A lot of us here in California do if you are a homeowner because your mortgage just by itself would be more than the standard deduction, which I believe for 17 off the top is 12,600 for a married couple. And half of that for single. Anyway -- so, going forward -- you may see less, because as a taxpayer, with your filing status, most single or married-filing-joint, you get a standard deduction. If that is greater than the itemized, you're going to take the standard to lower your bill. >> You have any advice on what people might do this year, to save on their 2018 taxes? >> Yeah, the advice -- we do not take a stance on much, but it will put this out there in general. As you prepare your return, definitely take a look at 18 in terms of your withholding, because you do not want to have to much withheld or not withheld. The average refund is about $2800, and about 75% or three out of four of us get a refund. That refund, that $2800 is your money that you are over withholding to the government every year. With this new change, it is not a bad idea I imagine, with all the different withholding tables that are given to employers, based on this new law, that you take a look at your situation, and do some tax planning as the year goes, savoring the taxes you pay closer to what you owe based on your complete financial situation. >> You know, this time of year taxpayers really get bombarded with ads for tax preparation, and a lot of the online tax preparation claims -- they say they have gotten better. They have all the software that they can use to find you the best deductions and so forth, has that gotten better? >> I don't know that we could say that it has gotten better or worse. We always say -- in terms of coming from the IRS, that all of the software providers are partners. They are up to speed with all of the new law, and that is built into their software that you are going to use. And based on the situation you put in there and the answers you provided, or with the tax professional who is using software anyway, it should be up there to give you what you need, in terms of what is updated in tax law no question. It is only as good as the information you put in it. It is always good to be organized if you will, make sure that you have all of your information in front of you. Your record-keeping is good, because -- for two things, you don't want to miss out on a deduction or credit. That is important. You should not pay any more taxes than you need to. You should maximize your refund based legitimately on tax benefits that are there for you. On their side but, that record-keeping also provides a substantiation in case you are asked about one thing or another. >> And, what kinds of help does the IRS offer taxpayers? >> IRS.gov is the first and best place to go for sure. We have a lot of great self-help tools there. Try IRS.gov first before you call. We realize people will call, but if and when you get through, you may be on hold for a while. And you may not get through at all. And I'm sorry to mention that, but it is a resource issue, and it is reality. So, go online first. Do what you can to access our website. Try one of our tools that may get you your refund status. I mentioned free file, that is a program on IRS.gov for lower and moderate income taxpayers. I believe that tops out at $66,000 of income. You can use a software provider there to file a federal return for free. And then free in the community through TCE, which is tax counseling for the elderly. Those are up and running. That is this week if not next week for the next 9-10 weeks at various sites. Dozens of them all around San Diego County. >> I have been speaking with rough ale, thank you so much. >> I to be her, thank you. [ Music ] -- glad to be here, thank you.