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ou know the old saying attributed to Ben Franklin that states, "In this world, nothing can be said to be certain except death and taxes?" Well, the major tax reform that was passed by Congress through the Tax Cuts and Jobs Act and updates from the Internal Revenue Service (IRS) have left many Americans feeling quite uncertain about their tax situations for the 2018 tax year. From claiming dependents to personal exemptions, job related expenses to home mortgage interest, I've included some of the most common questions I have received from my clients regarding the new tax laws. • Are exemptions still available? No. The $4,050 personal and dependency exemptions have been eliminated with the new law. Before the new laws, the exemption allowed taxpayers to subtract $4,050 from their taxable income for each dependent they claimed. • Will I still be able to claim my child who is in college as a dependent in 2018? Yes. You will still be able to claim your child as a dependent for the educational credits. • Can I write off my unreimbursed job related expenses in 2018? No. Job related expenses fall under the 2 percent of Adjusted Gross Income Limitation that is no longer available under the Tax Cuts & Jobs Act. • Can I deduct job related moving expenses? No. That deduction has been eliminated for everyone except members of the armed forces. • Can I still deduct my home mortgage interest? Yes. Past mortgages are grandfathered into the new law. If you purchase a home between December 14, 2017 and 2026 you can deduct the interest up to $750,000.00 of the loan premium. • What about home equity line interest? No. The home equity line of credit interest deduction is no longer available and there is no grandfathering. This means anyone who has an existing home equity loan cannot deduct the interest after 2017. The new law does allow for deductions in limited circumstances. If the home equity line is obtained for home improvements, you can deduct up to $750,000 of the loan premium. • Should I be concerned about the new Estate Tax Law? It depends. If you have more than $11.2 million in assets then the answer is yes. The exemption rose from $5.6 million in assets

per person to $11.2 million, so a couple can exclude up $22.4 million in 2018.

Hiring An Accountant When people ask me at what point they need to hire an accountant, my answer is always the moment you become confused. Most individual tax returns are simple until you become eligible for credits, you sell your home or go into business for yourself. Once you become confused or if you research the tax laws in an area and you do not understand them, that is the time to seek out an honest tax preparer. You don’t want to make a mistake that could be very costly in the future. If you're wondering if an accountant can prevent you from being audited, the answer is it depends on you and your accountant. The IRS looks for those claiming credits they are not eligible for. If you lie to your accountant, then it is not his or her fault. However, a good accountant should ask enough questions and require enough information from you to prevent you from reporting something that you shouldn’t. Another benefit of using an accountant is that in the event that you are audited, you should have all of the proper documentation readily available to get through the process easily. It would take more than one article to share with you all of the benefits of hiring an accountant, but, in my opinion using an accountant and having his or her knowledge and expertise over the course of your lifetime far outweighs your investment. Remember to choose wisely and search for licensed Enrolled Agents and Certified Public Accountants. Most important, find an accountant you can trust because there are some licensed professionals out there who can be less than ethical. WGW Kevin Phillips, owner of K.L. Phillips, LLC in Carrollton, has a master's degree in accounting from the University of West Georgia and is licensed as an Enrolled Agent with the IRS. His office provides accounting, tax and consulting services yearround. His firm is a member of the Georgia Association of Accountants and Tax Professionals (GAATP) and the National Society of Accountants (NSA). If you'd like to learn more about the services he offers, please contact him at 678.664.0179 or visit the website at www.klphillips-ea.com to schedule your free consultation.

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Profile for West Georgia Woman Magazine/Angel Media, LLC

West Georgia Woman Magazine August 2018  

West Georgia's only women's lifestyle magazine, and the most read, popular and preferred magazine in West Georgia.

West Georgia Woman Magazine August 2018  

West Georgia's only women's lifestyle magazine, and the most read, popular and preferred magazine in West Georgia.