A taxpayer asked me: Can I deduct my child support payments in my tax return?
The answer is that child support is neither deductible by the payor nor taxable income to the payee. However, upon meeting certain conditions a dependency exemption and child tax credit can be claimed in the federal tax. In New York State a Non Custodial Parent New York Earned Income Credit can be claimed.
THE TCJA MADE THE FOLLOWING CHANGES
- Increase the standard deduction
- Suspend personal exemptions
- Increase the child tax credit
- Add a new credit for other dependents, and
- Limit or discontinue certain deductions.
TAX REFORM CHANGES
The Internal Revenue Service advised taxpayers that the doubling of the standard deduction due to tax law changes is likely to reduce the number of taxpayers who normally itemize.
In previous years, about one out of three taxpayers itemized. The IRS expects that number to be less for tax year 2018. The Tax Cuts and Jobs Act (TCJA) passed in December 2017, significantly affects deductions in several ways, impacting those taxpayers who normally itemize.
The TCJA doubles the standard deduction amount for all filing statuses. The standard deduction is a dollar amount that reduces the amount of income on which a taxpayer is taxed and varies according to their filing status. Because of this many qualifying taxpayers may find the increased standard deduction more than their total itemized deductions and opt for choosing the standard deduction rather than itemizing.
The Internal Revenue Service advised taxpayers that the doubling of the standard deduction due to tax law changes is likely to reduce the number of taxpayers who normally itemize.
In previous years, about one out of three taxpayers itemized. The IRS expects that number to be less for tax year 2018. The Tax Cuts and Jobs Act (TCJA) passed in December 2017 significantly affects deductions in several ways, impacting those taxpayers who normally itemize.
The TCJA doubles the standard deduction amount for all filing statuses. The standard deduction is a dollar amount that reduces the amount of income on which a taxpayer is taxed and varies according to their filing status. Because of this, many qualifying taxpayers may find the increased standard deduction more than their total itemized deductions and opt for choosing the standard deduction rather than itemizing.
Jocelyn E. Pierre handles the accounting needs of businesspersons so that they can concentrate on running their business! Visit http://atm-jep-cpa.com/Auditing-Services-Ridgewood-NY.html for more information.
From financial statements to payroll processing, CPA Joycelyne E. Pierre does everything she can to help small businesses. Visit http://atm-jep-cpa.com/Auditing-Services-Ridgewood-NY.html to learn more about her services!
