What to know for year two of the Trump tax plan

It’s that time again.

The IRS began accepting and processing tax returns for individuals on Monday.

Last year’s filing season was an adjustment for taxpayers and industry professionals alike as it was the first under a massive overhaul of federal tax law. While this year’s season is expected to be more sedate, there are a few tweaks to be aware of.

STANDARD DEDUCTION

The standard deduction doubled under the new tax law that took effect in 2018. In turn, the number of taxpayers who took that instead of itemizing on their taxes jumped sharply. An estimated 90% of taxpayers are expected to take the deduction this year.

While the standard deduction usually increases each year for inflation, it’s worth keeping the figure in mind as taxpayers adjust to the new system. Some people may still want to run through the exercise of deciding whether to itemize or not. The decision comes down to whether your deductible expenses are greater than the standard deduction. Tax preparation software or a tax professional can walk you through this with ease.

Single individuals now get a standard deduction of $12,200 and married individuals filing jointly qualify for a standard deduction of $24,400. Head of household individuals get a standard deduction of $18,350.

HEALTH INSURANCE

New this year: There is no longer a penalty on federal taxes for not having health insurance, something that was put in place by the Affordable Care Act. However, some states may still penalize you for not having health insurance, warns Lisa Greene-Lewis, a CPA and tax expert at TurboTax.

DIVORCE

Anyone who got divorced after 2018 and pays alimony can no longer deduct alimony payments. And ex-spouses who receive alimony are no longer required to claim it as income. Got divorced before 2018? The old rules...