As tax season approaches, several significant changes could mean larger refunds or reduced tax bills for you. – As tax season approaches, several significant changes could mean larger refunds or reduced tax bills for you.
“It very well could. You know, now there’s additional deductions that haven’t been there before,” said Kembel Tax Service Owner David Kembel.
10 News is working for you and spoke with Kembel about what you can expect when you file your taxes.
For seniors aged 65 and older, a substantial new deduction has been introduced.
“Those older than 65 now have a new deduction, and you would think that that would mean a bigger refund or owing less if you normally owe,” said Kembel.
If you’re 65 and older, this change allows you to claim an additional $6,000 deduction on top of your standard deduction. For married couples where both spouses qualify, this could mean an additional $12,000 in deductions.
Families with children under 17 will also see an increase in benefits. The child tax credit has been increased to $2,200 per child, up from the previous $2,000, providing an additional $200 per eligible child.
A notable change affects overtime pay.
“When you work overtime, you get paid time and a half. And so, the half part is deductible, meaning if you make $20 an hour and you go in and work an hour of overtime, you’re making $30 an hour. Well, the only thing that’s deductible is the $10,” said Kembel.
For service industry workers, there’s a new provision for tips.
“Tips isn’t taxable now. The catch there is you needed to be claiming the tips,” said Kembel.
Other notable changes include:
- Interest deductions for U.S.-made vehicle loans
- Elimination of certain credits, including electric cars, solar panels, and energy-saving improvements to your house.
A significant procedural change is also coming: the IRS is moving away from paper checks.“The IRS is transferring over to not accepting checks anymore. They don’t want to deal with paper checks. They want everything to be electronic,” said Kembel.
This means they’re requiring direct deposits for refunds.
10 News spoke with some of you to find out what you think about these changes.
“It’s been a tough year for everybody, and to get a little bit of cash back that you’re not expecting is a bonus, and I think it’s great if it happens” said local resident Becky Harman.
Meanwhile, another resident we spoke with doesn’t even think she’ll get any money back.
“I’m not gonna get more money back, I already know it.”
Tax experts recommend several steps for a smooth filing process.
Gather all necessary statements before filing, and don’t forget things like student loan interest statements, unemployment documentation, and retirement distribution records
“Biggest thing is just make sure you have all your statements ready,” said Kembel.
Kembel said to file early but not too soon. Filing your taxes early can help you find out what you owe sooner as well.
“If you find out in February that maybe you owe more than you thought, you can do something between February and April. You can work some overtime, you cannot go buy that big thing you were thinking of buying, you can plan for it,” said Kembel.