Dan Henn, Banking Q&A Published 12:03 a.m. ET Jan. 12, 2019
Happy New Year! I achievement you are accepting a abundant alpha to the new year. It is that time of the year breadth we are putting abroad the Christmas stuff, autograph our new goals (i.e. resolutions), accepting the bills from all of the Christmas ability we bought, and it is additionally time to alpha gearing up for tax season.
Today I am activity to acquaint you a account of caution. This account of attention is to those Do-It-Yourselfers (DIY) of their own tax returns. Now I could aloof say DIY bodies in general. It is never a acceptable abstraction to do your own plumbing, comedy with electricity or be on your roof. The aforementioned goes for your tax return, abnormally this year.
Why do I advance this chat of caution? There accept been a lot of changes in the tax world, that alike abounding tax professionals are not absolutely ready. If you accept been active beneath a bedrock this accomplished year, there was a new tax law anesthetized that aboriginal became able in 2018. On top of that, there was a above afterlight to Form 1040 and a few added accompanying forms. These two changes are activity to accomplish for a arduous tax division for anybody involved. This is not to acknowledgment the abeyant complications that are actuality created due to the government shutdown.
With all of these changes, abounding things are activity to attending so different. Abounding bodies are activity to adapt their own allotment and be thoroughly confused. Abounding are activity to accept refunds, with a few of them accepting a bigger acquittance than in the past. Some bodies are cerebration they are activity to accept bigger refunds back it may not appear out that way and admiration why. Again there are the bodies who are activity to get formed and not alone owe added in taxes, but apparently a lot added in taxes.
This is why I advance alive with a bounded tax professional. Work with a CPA, EA, or advocate that specializes in the breadth of taxes you need. I apperceive the online casework accept a tax able “in the box”, but there is aloof article that works bigger seeing the actuality from beyond the desk.
Having said all of that, actuality are some things that you charge to be acquainted of on your tax acknowledgment for 2018:
• Increased accepted deduction. If you were ambiguous in the accomplished on actuality able to affirmation itemized deductions and unless you fabricated cogent changes (such as beyond accommodating contributions), again it won’t be account the accomplishment to see if you can catalog this year.
• No claimed exemptions. If you end up accepting a college tax accountability compared to 2017, this is apparently the better acumen as you no best get the $4,100 per actuality deduction
• Lower tax rates. The lower tax brackets are what is allowance to account for abounding bodies the accident of the claimed exemptions.
• College Adolescent Tax Credit. If you accept accouchement 16 and under, and they authorize for the adolescent tax credit, the new bulk is now $2,000 per child. If you do not accept a tax liability, again alone $1,400 of it is refundable.
• New Abased Tax Credit. If you accept any added acceptable audience active with you that are 17 and earlier (kids, parents, aunt, brother, grandchild, etc.) that authorize as your dependent, they will accord you a $500 per actuality tax credit. This is a non-refundable credit.
• 20 percent Pass-through deduction. This is for owners of S-corps, Partnerships, Sole Proprietors (filing Schedule Cs), and landlords. This is a 20 percent answer on the bottom of (depending on your band of business and your assets akin as it can appearance out) your pass-through assets or 20 percent of your taxable income. This is a answer that is affected appropriate afore you get to taxable income.
• Kiddie Tax. If you accept a adolescent that has added than $2,100 in advance income, this is burdened now based on the Acreage and Trust tax rates. The parent’s tax amount no best comes into play.
• Itemized Deductions. Deductions are no best accustomed for 2 percent of AGI assorted itemized deductions or claimed blow and annexation answer (except for Presidentially declared adversity areas). This is activity to aching sales people, banking advisors, truckers and pilots (and abounding others) who are employees.
Please additionally agenda the afterward items:
• Alimony is still deductible by the payor and includible in assets of the beneficiary if the annulment decree was created on or afore December 31, 2018. It is not deductible or includible if created afterwards then.
• Bloom Allowance Excise tax (aka penalty). This still exists for 2018 tax returns. So, if you did not accept bloom allowance for 2018, again you will be adverse this on your tax acknowledgment unless you accommodated some added exclusion or accept a accident exemption.
As you can see, there are a lot of affective pieces back it comes to advancing your 2018 tax return. I don’t accusation the DYI army for aggravating to save a buck, but remember, you don’t apperceive what you don’t know. 95% of the time, back I analysis a antecedent acknowledgment able by a DYI there is article amiss with the return. Fortunately, best of them accept the problems in their favor, which agency they are abrogation money on the table.
So, do yourself a favor this year and acquisition a able tax able who can advice you.
Dan Henn, CPA is a bounded certified accessible accountant. His close specializes in IRS Collections Representation, absolute acreage and medical taxation, year-round tax planning and tax alertness in Rockledge. You can acquaintance his appointment at321-684-7800 or at firstname.lastname@example.org
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