While local workers may see a boost in their take-home pay in the coming weeks as the result of the recently passed federal tax reform, those who are filing taxes this spring will see little change — at least this year.
The Internal Revenue Service is expected to issue new withholding tables for employers and payroll administrators in the coming weeks, and the new rates could go into effect as early as February. But according to Bryson Pelc, a certified public accountant in Kalispell for more than a decade who currently works at Jordahl & Sliter, the way that you file taxes come April will not change until 2019.
Starting next year, the standard deduction will double for nearly everyone, although some write-offs will be eliminated or capped. Currently, people can write off all of their state and property taxes on their federal tax returns, but starting in 2019, that will be capped at $10,000. People who are self-employed will also see changes in what they can write off. While Pelc said some items purchased for work will still be deductible, “entertainment” such as meals for clients will no longer be an acceptable write-off.
“There will be a lot of changes when you’re filing your 2018 taxes (next year),” Pelc said. “The IRS is going to be very busy this year creating new forms.”
Pelc said tax reform, which was passed by Congress in late December and signed into law by President Donald Trump, would impact people differently, but in general it could benefit some small businesses. One thing it won’t do is simplify taxes, Pelc said. Republicans, including Speaker of the House Paul Ryan, promoted last year’s tax reform legislation as a way to make filing taxes so simple it could be done on a postcard.
“Maybe if you shrink the font it could fit on a postcard,” Pelc said. “Taxes are always complicated, and we’re basically moving from one complex tax system to another complex tax system.”