New tax law will benefit middle class, but not all provisions will work in SC, experts say
Tax season begins in just a few weeks, and the stipulations of new federal tax laws will present taxpayers with some significant changes.
Mary Tinkler, Charleston County Treasurer said a number of voters already have come to her office with worries, especially about property taxes.
“For instance, right now they can put a full property tax bill that may be $21,000,, and deduct that full amount,” Tinkler says. “Next year, that cap will be at $10,000, but that cap is a combination of property taxes, a combination of income, and sales tax.”
The new tax law allows individuals to pay property taxes in advance, but that doesn't apply here, Tinkler says.
“In South Carolina, we are unable to do that," Tinkler says. "Our tax system is set up, not to handle that advance payment of taxes. Our property taxes are paid actually in the rears.”
Meanwhile, tax preparers are getting ready for all the changes that are coming in the upcoming year.
Aquila Chisolm, a tax professional in North Charleston, says there will be benefits for middle class families with children.
“The child tax credit should help significantly,” Chisolm says.
The current child tax credit is capped at $1000 per child. The new bill raises that maximum to $2000 per child. There will be other benefits, Chisolm says.
“For taxpayers that currently take their standard deduction, for married filing joint, is currently at $12,000. It’s going to double starting in 2018 to $24,000. So those taxpayers are going to receive a larger tax deduction, thereby minimizing their tax liability.” Chisolm added.
Chisolm said the middle class tax payer will see the biggest change in the amounts they're able to deduct.
“For an individual or a couple that’s used to deducting, 20, 30 thousand dollars in state taxes, the maximum they're going to be able to deduct in 2018 is $10,000.”