Alternative minimum tax (AMT). The new tax law curbs who is hit by the AMT. The final bill keeps the AMT, but reduces the number of filers subject to it by raising the income exemption levels to $70,300 for single filers, up from $54,300 previously; and $109,400 for married couples, up from $84,500.
Estate tax, charitable contributions, 529 plans. One of the most significant changes is that the new law exempts almost everybody from the estate tax. While the bill does not call for a repeal of the estate tax, it essentially eliminates it by doubling the amount of money exempt from the estate tax to $10.98 million for individuals and $21.96 million for married couples.
The law does not change a taxpayer’s ability to deduct charitable contributions (assuming they itemize deductions). However, the increased standard deduction will reduce the number of taxpayers who itemize deductions and could impact future contributions.
Another big change under the new law is that 529 accounts can now be used for K-12 education. Previously, these accounts could only be used for higher education. Up to $10,000 per year can be used on qualified K-12 education expenses.
To understand how these tax law changes as well as others not listed above may impact you, contact your CPA.
I was always taught to keep my financial matters personal and be relatively secretive about my money. Now that I’m getting married, how open I should be with my fiancé?
Often, couples hide financial secrets from their partners, which can negatively impact a relationship. Your fiancé is about to become a 50/50 partner in your life and that includes your finances. It is best to be open and communicate regularly about your financial situation and your financial goals no matter how short or long term they may be.
At the same time, make sure to be sensitive to their financial circumstances and financial goals. Talk to your significant other about what you want for the future. Take some time to build a shared vision of what your financial future looks like.
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