Ohio will begin accepting e-filed returns this Monday, January 27. There is some good news for Ohio taxpayers this year. A couple of highlights:
· Ohioans will enjoy a 4% reduction in the income tax rates.
· Low- to moderate-income residents will receive further cuts. The state has cut the number of tax brackets from eight to six by combining the bottom three brackets. This means Ohioans making $21,750 or less, will pay no state income tax.
· Lower income Ohioans will benefit from a simplified and expanded earned income tax credit. Qualified taxpayers will now be able to claim a credit that equals 30% of their federal earned income credit. Ohio’s previous credit was 10%.
· Ohioans who contribute to a 529 plan for college savings can still deduct $4,000 per beneficiary from their Ohio taxable income. Any contributions above $4,000 can be carried forward to limit tax liability on future returns.
· The Ohio credit for political campaign contributions and financial institutions tax credit are no longer available and will be removed from tax forms in future years.
A trained tax professional can help you navigate the complicated Ohio income tax rules, save you time, and in many cases – money. Now is the time to meet with your tax advisor to develop strategies for 2020.
The author, Bryan Corcoran, Esq, is a retired Marine Judge Advocate. He earned his J.D. and Masters in Taxation from the University of Akron in 1997. He is currently a Tax Analysts for Heritage Income Tax. The views expressed in this paper are his own, and are not intended as a substitute for professional tax planning or legal advice.