What tax changes mean to you

By Ken McEntee

The federal income tax changes enacted last month for the 2018 tax year have been called the most significant tax reform in more than 30 years. How will the changes affect you?

Gary Cerasi, CPA, owner of Creative Business Strategies, explains some of the major changes and how they might impact individuals and small businesses.

Q: What are the biggest changes to the new tax law and what do they mean for the average family?
A: I think most taxpayers will feel the change in their itemized deductions. There are several changes to what is and what is not allowed as an itemized deduction, and the threshold for claiming the deductions has gone up substantially.

Q: What’s a standard deduction and how does it affect me?
A: The standard deduction is the deduction the government gives you for living, breathing, having a social security number and filing a tax return. It has been substantially raised for 2018, so it will more significantly reduce the income that you pay taxes on.

Q: Will I be able to deduct interest on my home equity loan?
A: Not anymore. No more borrowing on your home to buy a car or pay educational expenses and getting the interest as a deduction on your tax return.

Q: Will these changes lower taxes for average families?
A: This will vary from family to family. But I can compute it with tax software, showing my clients what their 2017 tax return would look like with the 2018 law.

Q: How do the new rules impact small businesses such as “pass-through” entities like S Corporations and LLCs?
A: There is a new 20 percent deduction from the net revenue of pass-through entities.

You can schedule a no-cost consultation with Gary by calling 440-546-9359. Creative Business Strategies is located at 192 East Wallings Road, in Broadview Heights. You can learn more at CreativeBizStrat.com. You do not have to be a business owner to benefit from Gary’s expertise.