Many taxpayers saw an immediate increase in their paychecks after H.R. 1, the Tax Cuts and Jobs Bill, became law on January 1, 2018. But they may not be paying attention to the impact of the new law on their financial situation until they file their income tax returns in 2019.
Among other changes, the new law doubles the standard deduction, but eliminates itemized deductions and limits property taxes.
Business reporters can give their readers the opportunity to do some timely financial planning in 2018, by looking into one, or all, of the following angles and resources in this important story:
Explain the new tax cuts to your readers
The seven income tax brackets in the tax code haven’t changed as a result of the new law, but income levels have, which means that most taxpayers will benefit from the new law. According to calculations from the Tax Policy Center, tax cuts will average less than 2 percent for most (90 percent) of those on the lower end of the income scale, and 4 percent, for those with higher incomes.
Team up with your news organization’s data-reporting staff or adapt this open-source tax-modeling software to help readers estimate their tax savings. The staff at the Open Source Policy Center, which builds economic models related to public policy, can also offer help.
Offer your readers a free “tax clinic” on the new law
Ask two to three local financial planners and accountants to look at the financial situation of selected readers and offer specific advice on changes to make now or avoid. Pick an accountant with the Personal Financial Specialist designation.
Choose readers at different income levels and situations (single, married, head of household), as well as those who are retired or disabled.
Contact your state’s labor department to research your selections. Then reach out through social media to interview readers about how they plan to use their estimated savings.
Report on available free tax help
Before spending some — or all — of the money they just saved from the new tax cuts bill, some of your readers may want to see if they qualify for free tax help.
Professional Tax preparation fees are rising. Fees ranged from $176 for a simple Schedule A to $457 for a return including a Form 1040, Schedule A (itemized deductions) and a state tax return, according to a recent survey from the National Society of Accountants.
Free online tax-preparation services now include TurboTax AbsoluteZero, CreditKarma Tax and H&R Block’s MoreZero for earners in low- and moderate-income brackets, joining online (e-File and the Free File Alliance) and in-person programs from the Internal Revenue Service (Volunteer Income Tax Assistance program and Tax Counseling or the Elderly). Volunteers with the AARP Foundation’s Tax-Aide program also offer help during tax season in libraries, community centers, and other locations.
