If you’re an American taxpayer, the new tax laws just passed by Congress and signed by the President may save you money or cost you money. But we know one thing for sure: you’ll never figure them out.
That’s right, Outraged readers, filing your dreaded income tax forms will be even more complicated the next time around. If you hire a tax preparer or accountant, you’ll probably be paying them even more to tell you how much you owe Uncle Sam.
The new laws contain a child tax credit of $400-$500. But it decreases, and then vanishes, as income increases. It also changes, depending on the number of children you have. Of course, the amount of the deduction is different in 1998 and 1999.
There used to be a single rate on capital gains taxes. Now, there are three different rates for capital gains. Did you own hose stocks for less than 18 months, more than 18 months but less than five years, or more than five years? Which rate depends on how long you’ve held the investment. Unlike the old rules, though, it also depends on which type of investment generated the profit. Profits from collectibles, real estate, and small businesses are taxed at different rates than other investments. Got that?
Do you make contributions to an IRA? Starting now, you have to choose between three different IRA plans. You’ve still got your deductible IRA’s but now you also have new non-deductible IRA’s. Contribution limits, and who is allowed to make IRA contributions, have also changed.
The tuition credit may save you money. But not this year. And not if your income is over a certain limit. And not if the school is not “qualified.” Except, of course, for the retroactive changes.
Right now, your accountant is planning the new addition on his house.
(Source: Kansas City Star.)