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Tax reform: Here's what you need to know before next year - Live5News.com | Charleston, SC | News, Weather, Sports

Tax reform: Here's what you need to know before next year

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CHARLOTTE, NC (WBTV) -

You'll get your W2's in the mail before you know it, which means it's tax time! After you go through the process of filing your taxes this year, some elements will be different when you file next year now under President Donald Trump's newly signed tax bill.

With the help of financial expert Paul Durso, we're on your side helping you navigate through some of the benefits and deductions that will change when you file next year.

Child tax credit

If you have a family, this first one is for you - the child tax credit. This year when you file, you can claim the child tax credit if you're single and make up to $75,000 or if you're married and make up to $110,000. Next year it changes. You'll be able to claim the full credit if you make up to $200,000 if your single, and if you make up to $400,000 if you're married.

So more people get to take advantage of this credit next year.

You'll also get a credit of $2,000, that's double what the credit is currently. Paul Durso explains how this credit will translate to cash in your pocket. “The amount of dollar for dollar refund you get on that $2,000 can max up to $1,400," Durso said. "So even though you get a credit of $2,000, the way the tax law has been written you can actually get $1,400 of that back, in cash, in credit."

Using money from a 529

When people think of using money they socked away in a 529, it's to pay for your child's college education. Starting this year you can use the money in your 529, up to a certain amount, to pay for private school tuition for your child's secondary education. So that money can be used to pay for a K-12 education at a private school.

 “If you send your child to a private school you can actually take up to $10,000 out of a 529 and it's 100 percent tax deductible paying for tuition for elementary school, for pre-K, for high school, for middle school. All of that can now be used out of a 529 plan," Durso said.

Charitable donations

When you're donating to great causes this year, or if you give to your church, there is a change in the amount you can write off. So, take note of your charitable donations this year. The tax benefits will change when you file your 2018 taxes.

First, you have to consider whether you’re going to claim the standard deduction because that number has doubled under the tax bill. If your single, you can subtract $12,000 from your taxable income. If you're married you can subtract $24,000 from your income.

Based on those numbers, if what you itemize exceeds that amount then you can include your charitable giving.

“Charitable contribution deductions have gone from 50% to 60 percent," Durso said. "So that basically means if you gave $100 or $1,000 you'll be able to deduct 50 percent of that off of your taxes. So, if I gave 1000 bucks to my church, $500 is a complete write off. Now it's $600.”

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