November 23, 2020

New Tax Laws For 2020

New Tax Laws For 2020 in 2019 tax law continues to evolve butguess what we're gonna evolve right along with it to help you conquer yourtaxes in 2019! I've put together a free downloadable, spreadsheet for you packedwith more information than ever before not only do I think this, spreadsheetwill help you plan your taxes better for 2019 and beyond but I think it also mayhelp you with financial planning as well I released the video on the 2018, taxupdates last year and had an overwhelmingly positive response thanksto all of you guys so I wanted. To make a follow-up video to that and I willcontinue to make a tax update video every single year as long as you guyswould like me to.

With that being said I don't. Want to waste any more time I wantto just dive right into the information but I do have a quick favor to ask ifyou guys, enjoy the video please let me know by crushing that like button orjust let me know down. In the comment section below what do you think of allthese new tax laws how is it impacting you is it impacting you in a good waybad way, or whichever I would love to hear your. Thoughts down below by doingthat it's gonna help this information reach more and more people thank youvery much and let's get started now when I think of tax one of the things everysingle year I like, to look at first because these numbers change everysingle year is the tax, brackets themselves I'm always wondering what taxbracket am I in now or what is my highest tax rate so on screen what youguys are, seeing is you're seeing the tax brackets are the tax tables and you'regonna see, I have listed it now for if your file single married filing separatehead of household, and married filing joint now you can feel free to pause thevideo as we go through this worksheet I'm not gonna read all these numbers toyou off on screen however if you look over to the left-hand. Column you'regonna see some percentages those percentages, are tax rates and they'renot just any tax rates they're marginal tax rates which means when you see thatpercentage let's take.

A look at the 22 percent for example what that means isif you fall into the 22 percent tax brackets based on your income and. Filingstatus that means 22 percent is the highest amount of tax.

You'll pay on eachadditional dollar earned that's what marginal tax is it's thehighest of tax you and I pay on each dollar weearn now. In case you don't know this is different from your effective tax. Ratethat's very different it's very important to learn the differencebetween your marginal tax rate and your effective tax rate if you don't knowwhat that is don't worry, I've actually made a video on that I'm gonna post alink to the video down in the description section below so make sureto check it out if. You want to learn more about that moving on down the, linenow let's talk about investments and long-term capital gain rates in thespreadsheet this year what I've done is I've included, the actual long-termcapital gain rates on the spreadsheet itself so you guys can see what they arewhat's great about long-term capital gain rates is it's, one of the mostadvantageous tax rates you can get Nixa taxes emp'd income there's really notmuch, that's better as you can see here from the graph or from the from thespreadsheet is, that if your income is low enough when you go to sell assetsnow typically we're talking about stock sales that's the most common thingpeople sell on a regular basis but, you can see if your income is low enoughwhen you go to sell your stocks first for example you'll pay 0% tax. On thatincome the important thing to remember about long term capital gains. Is thatyou have to hold the investment for longer than a year before you sell itthe next thing we're seeing. Is that in 2018 the standard deduction has gone upa little bit and this is this is very typical it usually increases everysingle year so in 2018 if you were single, for example your your standarddeduction. Was $12,000 but in 2019 it has gone up to twelve thousand two hundredand remember your standard deduction what it, does is it it's a set amount ofthe deduction you get automatically when you go to file your taxes. That's gonnareduce your taxable income by that amount so if you made a hundred grand in2019 you would subtract in your filed single you would, subtract the standarddeduction from it of twelve thousand two hundred dollars and what is, left over isyour taxable income for the year I have a whole video that explains how thestandard deduction works and itemized deduction. Works that I'll link up in thedescription section of the video personal exemptions this one I still geta lot of questions about even in 2019 people are still very very on athey're that personal exemptions are no.

Longer applicable so just keep that inmind now the the dependency rules of the rules to claim a, qualifying child are aqualifying relative those. Are still in place and you it's really important youknow those rules to help you claim things like credits so it's justeducation credits the child tax credits the, Earned Income Credit and so on andso forth so knowing all those rules is still very important it still applieseven, under the new tax cuts and Jobs Act that started in 2018 speaking of taxcredits let's talk about the. Child tax credit amounts have not changed theamounts with a credit have not changed but I. Just want to clarify that the thecredit is up to $2,000 per child or it's refundable up, to $1400 per childdepending upon a person's particular tax situation so in some instances you mightget the full two thousand in other instances you might not, it all dependson your overall income and what else is going on in. Your tax return thatdetermines that but the child tax credit I can see this year when doing people'staxes that it is helping a lot of. People because they've greatly increased theincome phase-out limitations on that so a huge chunk of society. Is now able totake advantage of this credit the next area I want to cover is state and localincome taxes are salt and, this is still limited the this is found on schedule awhich is covers itemized deductions your total state and local income taxdeductions is still capped now at $10,000 that hasn't changed to myknowledge, so I actually got a phone call from my uncle just the other. Day and hewanted to know why he's paying more in taxes year than, in previous yearswell I said you usually itemize he's like yeah I do well he's paying more taxbecause his state and local.

Income taxes are now limited to $10,000 whichunfortunately for some people that hurts them tax wise, under these new tax lawsand so they're able to they're not able to get as large.

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