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Your 2018 Taxes Will Be Affected by the Tax Cuts & Jobs Act

It's no secret that the Tax Cuts & Jobs Act (TCJA) is the biggest change to the Federal Tax code since Reagan was in office.  What may come as a surprise to some Americans, however, is that this new law will significantly affect your tax return in 2018 and beyond.  

As we embark into this year's tax season, we're finding that many taxpayers are seeing smaller tax refunds or, as in my case, even OWING taxes when filing.  This is the result of a combination of a few major changes from 2017 and prior years.  

First, most taxpayers were likely receiving larger paychecks in 2018 without knowing it.  The federal withholding tables were updated last year, which resulted in many folks having less withheld from their paychecks.  Having less withholding usually leads to smaller refunds or owing taxes.

Second, many of the tax deductions were eliminated for years 2018 and forward.  Unreimbursed employee business expenses were eliminated as a deduction.  Moving expenses are no longer tax deductible.  Such changes may come as a shock to tax filers.

Third, the TCJA changed how most people will take the standard deduction and removed personal and dependency exemptions, entirely.  Don't be surprised if you're taking the standard deduction starting in 2018, even if you itemized your deductions in prior years.