Tax

Tax Time: Understanding the Changes to the Tax Code

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Tax time is an annual event that can be both exciting and stressful for many people. With the ever-changing tax code, it can be difficult to keep up with the latest changes and understand how they will affect your taxes. This article will provide an overview of the most recent changes to the tax code and how they may affect you.

The most significant change to the tax code in recent years is the Tax Cuts and Jobs Act of 2017. This act made sweeping changes to the tax code, including reducing the number of tax brackets, increasing the standard deduction, and eliminating certain deductions. It also changed the way certain types of income are taxed, such as capital gains and qualified dividends.

In addition to the Tax Cuts and Jobs Act, there have been other changes to the tax code in recent years. For example, the Taxpayer First Act of 2019 made changes to the way the IRS handles taxpayer disputes and appeals. It also made changes to the way the IRS collects taxes from taxpayers who owe money.

The CARES Act of 2020 was another major change to the tax code. This act provided relief to individuals and businesses affected by the COVID-19 pandemic. It included provisions such as stimulus payments, expanded unemployment benefits, and tax credits for businesses.

Finally, the American Rescue Plan of 2021 made additional changes to the tax code. This act extended certain tax credits, such as the Earned Income Tax Credit and the Child Tax Credit. It also provided additional relief to individuals and businesses affected by the pandemic.

Understanding the changes to the tax code can be difficult, but it is important to stay up to date on the latest changes. Knowing how the changes may affect your taxes can help you make informed decisions and maximize your tax savings. If you have any questions about the changes to the tax code, it is best to consult a tax professional.