13 October 2018
The Tax Cuts and Jobs Act (TCJA) is the official name for the tax law changes enacted at the end of 2017 and became effective for 2018. Among the many changes within the TCJA there are two in particular that I want to focus on for this article:
- The federal standard deduction was significantly increased.
- The total amount that can be deducted on Schedule A for state and local taxes (SALT) from your federal taxes is limited to $10,000 per year.
I have been doing some modeling of the impacts of those two changes, and something I discovered is those changes have created situations in which tax payers filing Virginia tax returns have the potential to needlessly pay higher taxes than necessary. I want Virginia taxpayers to be aware of those potential risks so they can avoid them. My problem was figuring out how to communicate some relatively complex tax topics into something that can be understood before it puts the reader into a tax-knowledge-induced coma. My solution was to make a presentation, narrate it, and turn it into a video that can be viewed. Here it is:
While the video specifically addresses Virginia tax issues, taxpayers filing tax returns in other states may face similar potential risks. I have not analyzed the impacts of the new tax laws on other states. Taxpayers filing in other states should consult a tax professional if they have concerns.
If you have some questions after watching the video 3 times, please contact me. If you understood it the first time, let me know that, too, so I know how much effort I need to put into making my videos comprehensible. Thanks!