The IRS personal exemption for each taxpayer and dependent has been eliminated while the standard deductions have been doubled. RyanJLane/Getty Images The 2017 Tax Cuts and Jobs Act promised to reduce the tax bill for most Americans by lowering income tax rates, introducing new deductions for business income, and significantly increasing the standard deduction and child tax credits. But some popular deductions were also eliminated starting in 2018, the most prominent being the personal exemption. In the past, every taxpayer was allowed to automatically deduct $4,050 from his or her taxable income as a personal exemption. The same personal exemption could be claimed for a spouse and for each dependent child under 19 years old, plus full-time students between 19 and 23 years old. To give an example, a married couple with three qualifying dependent children (12, 17 and a 21-year-old college student) could use the personal exemption to automatically deduct $20,250 ($4,050 x 5) from … [Read more...] about What Happened to the Income Tax Personal Exemption?
Tax exemption under income tax act
Tax season is right around the corner, and this year could be a doozy. Congress passed the Tax Cuts and Jobs Act in December 2017, which means there's a host of new rules and regulations for the 2018 tax year. The laws were already complicated -- and now we have new tax rates, new rules for the standard deduction and a slew of other changes. Oh, you have questions? Sorry, the federal government is shut down.Despite the fact that the IRS has closed its doors and phone lines, there are resources to help you navigate the process of filing your taxes for 2018. The IRS published a 12-page PDF covering the major changes that took effect in 2018, and there may be answers to some questions on the IRS website. Plus, CNET has taken a fresh look at how the different online tax prep services stack up this year. We present here some answers to common questions about when to pay, how to pay, who to pay, where to send your payment -- and, if you happen to … [Read more...] about Taxes 2019: When they’re due, how to file online and more
More Questions and Answers on the Shared Responsibility Provision Spouses come in handy for all sort of things, even health insurance. slkoceva/iStock editorial/Thinkstock 5: Does the provision affect me if I'm on my spouse's plan from work? If you and your children are covered by your spouse's employer-sponsored plan, you're likely good to go. Most employer-sponsored plans provided minimum essential coverage. In addition, you and your children don't have to be covered under the same policy [source: IRS]. 4: How much is the penalty? You will be taxed if you do not adhere to the individual mandate. The idea behind the tax is to make sure most everyone has health care coverage. Without the penalty, people would not opt to buy insurance even though the law requires insurance companies to provide coverage for everyone regardless of pre-existing conditions. If that were the case, the cost of health insurance would skyrocket as the sick flooded the market while the healthy … [Read more...] about 10 Questions and Answers on the Shared Responsibility Provision
Felue Chang who is newly insured under an insurance plan through the Affordable Care Act receives a checkup from Dr. Peria Del Pino-White at the South Broward Community Health Services clinic in Hollywood, Florida in 2014. Joe Raedle/Getty Images The Affordable Care Act (ACA) relies on the IRS to enforce the individual mandate provision of the health care law. According to the IRS, the individual mandate requires that every taxpayer and every member of the taxpayer's family meet one of the following criteria: Have "minimal essential coverage," either through an employer, a private health insurance plan, or other government-sponsored coverage through Medicare, Medicaid, the Department of Veterans Affairs, etc.; orPay the penalty for not having health insurance when filing a federal income tax return; orApply for and receive an exemption from the individual mandate provision. The federal income tax forms for tax year 2014 (filed in 2015) will be the first to include questions … [Read more...] about Tax Exemptions and the Affordable Care Act
There are a lot of special — and confusing — rules that apply to members of the clergy come tax time. Mike Watson Images/moodboard/Thinkstock Anyone familiar with the Christian Gospels will remember that Jesus answered a challenge about whether it's right to pay taxes, saying, "render to Caesar the things that are Caesar's, and to God the things that are God's" [source: Biblehub]. Today's complex U.S. tax code, however, makes it difficult to figure out what exactly is "Caesar's." Considering that churches and religious organizations qualify as tax-exempt organizations in the United States, one might assume that religious clergy and ministers themselves are exempt from income taxes. But this isn't the case. Devoting your life to God does not necessarily exempt you from the taxman. Clergy must pay income taxes just like everyone else. Unfortunately, the rules for clergy income taxes can be especially confusing. Some ministers don't realize that even if they are … [Read more...] about Clergy Tax Guide