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Tax changes for 20203/16/2023 Single family homes would get a discount of about 3 percent. The taxes owed for apartment properties would be reduced by about 5 percent. Do you own real estate?Īnother law will temporarily lower property tax rates for tax years 20. Emily Sirota, a cosponsor, adding that the new policies were the result of years of work. “We will dedicate more economic relief toward our families, our small businesses, our workers who need it the most,” said state Rep. The credit is refundable - meaning that people who don’t have state tax obligations would simply receive a check from the government in that amount. That could range anywhere from a few hundred dollars to $2,000 per child. The value of the credit will be based on the federal child tax credits, and it will depend on the age of the child and the household income. The credit will be available for individual filers who make less than $75,000 or households under $85,000 in income. Who will directly benefit: Do you have kids?īeginning with tax year 2022, the state will offer a child tax credit - basically, money for households with children. People who own certain agricultural property will still be able to take a deduction. That deduction will largely be eliminated starting in tax year 2022, forcing more people to pay state taxes when they sell assets like land, stock and businesses, in addition to federal taxes. Do you pay capital gains taxes?Ĭurrently, Colorado taxpayers can be exempted from paying state taxes on capital gains in some cases. and it attempts to crack down on off-shore tax havens, among other changes. Additionally, the new law says that cloud computer access should be taxed. The legislation also will result in higher tax bills for large retailers and oil and gas companies. By embracing the “Finnigan method,” the state expects to collect nearly $10 million in extra revenue per year. They'll also lose a rule that allowed them to pay lower taxes on the sale of certain financial products, compared to other institutions.Ĭolorado will adopt a new method to calculate the taxes owed by companies that do business in multiple states. It will now be more difficult for them to claim a tax deduction that rewards companies with offices in Colorado, which the sponsors say has done little to encourage job growth. The largest sum will come from insurance companies. The legislation is expected to deliver nearly $150 million in annual revenue by changing how various businesses pay taxes. The change takes effect in tax year 2022. Tax reformers argued that without the cap, the 529 accounts were providing too much benefit for wealthy families. The legislation caps that deduction at $30,000 per household per year. People who put money in a 529 college savings account are allowed to take a deduction for those contributions - in essence, sending money straight into the savings account without paying taxes on it. Do you put a lot of money in a college savings fund? That’s expected to draw in nearly $80 million in annual revenue. The state legislature had already temporarily eliminated that break, which was created in the federal tax changes in 2017. They will not be allowed to take the “pass-through” deduction on their state taxes. The law will also eliminate a deduction for business owners who make more than $500,000 of individual income, or $1 million as a household. The change to itemized deductions is expected to be one of the biggest money-makers for the state, delivering more than $100 million in annual revenue. Under the new law, those wealthier households can’t subtract more than $60,000 from their taxable income. Itemized deductions allow people to lower their taxes by subtracting certain expenses - such as mortgage interests and charitable donations - from their taxable income. If you make more than $400,000 per year, you’ll face a new cap on itemized deductions for state taxes. (Taxes for that year are due in April 2023). One of the new laws, HB-1311, will eliminate certain state tax deductions for individuals and households with higher incomes, beginning in tax year 2022. Whose tax payments may increase: Do you make more than $400,000 per year?
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