Tax reform impact on tax season

Sweeping reform laws have little impact on 2017 returns

WARREN — Changes to U.S. tax laws in December will not impact the majority of returns for 2017 because the increased deductions and other modifications did not become effective until Jan. 1.

“These changes will affect the 2018 income tax filings, which will be done in 2019,” said Vince Flask, who owns Liberty Tax offices in Warren, Howland and Girard. “Employers are now taking less in federal income taxes from employee paychecks, so taxpayers may be taking more money home with each paycheck.”

The standard deduction for a single taxpayer is $6,350 for 2017. Next year, the deduction will increase to $12,000 for single taxpayers while the standard deduction for couples increases from $12,000 to $24,000.

Also, the individual mandate that is part of the federal healthcare law remains in effect for 2017 returns.

“Tax payers still must be able to show they have health insurance or face penalties,” Flask said.

One of the provisions of the new tax law that will affect 2017 taxes is medical expenses. Expenses that exceed 7.5 percent of a person’s 2017 gross income can be deducted this year. For example, if a taxpayer earned $40,000 in 2017, anything above $3,000 can be deducted.

Tax day this year is April 17 — two days later than normal. That’s because April 15 is a Sunday and Washington, D.C., celebrates Emancipation Day on April 16.

Woodrow Riddle, a tax preparer who has been working with AARP for seven years, said residents with non-itemized individual or joint tax returns can get their returns done for free at Lordstown, Niles and Warren.

Tax preparers are at the Warren SCOPE, 375 N. Park Ave., Monday through Friday, throughout the tax season. Appointments are needed to receive the service.

The AARP tax preparers at SCOPE in Warren did tax returns for more than 1,500 people for the 2016 tax year. Hundreds more were done at other centers — 200 were prepared in Niles; Howland, 300; Girard, 200; Lordstown, 80; Champion, 150; Cortland, 120; and Hubbard, 300.

“We receive two weeks of training,” Riddle said. “This year, for the most part, was the same as recent years. Next year, there may be some additional training necessary.”

Tax brackets for 2017 are 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent and 39.5 percent, the same as years past. For the 2018 tax year, the tax brackets will change to 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent and 37 percent.