Preparing for the 2019 Tax Season
Tax season is just around the corner. Major changes were made to the tax laws in 2018 that might change the way you’ve filed your returns in the past. Changes to the standard deductions, child tax credit and tax brackets could impact your household. We break down the changes you will see when you go to file your 2018 return next year.
Best way to file tax return is electronically
The tax cut and jobs act that took effect in January 2018 will affect both individuals and businesses. The best way for you to prepare your tax return is to file it electronically. The benefit of filing it this way is that the computer software does all of the calculations for you and results in a complete and accurate return. If you do not have access to a computer or the internet, there are numerous ways to files your taxes. You can get professional assistance, attend one of the Volunteer income Tax Assistance (VITA) sites or seek out other free assistance sites.
New tax rates created
Most of the tax rates have been reduced. In addition, the tax rates and brackets for the unearned income of a child have changed and they are no longer affected by the tax situation of the parents.
Some other changes that could affect families are the increase in the amount of the standard deduction, the suspension of personal exemptions, an increase in the child tax credit and the discontinuation of certain dedications.
The standard deduction for each filing status for 2018 are:
Single $12,000 (up from 6,350 in 2017)
Married filing jointly $24,000 (up from 12,700 in 2017)
Married filing separately $12,000 (up from 6,350 in 2017)
Head of Household $18,000 (up from $9350 in 2017)
Standard deduction VS itemizimg
Many people will now find it more beneficial taking the standard deduction than itemizing. The limit on overall itemized deductions has been suspended. Which means that if you do itemize, your itemized deductions are no longer limited by your adjusted gross income over a certain amount.
The deduction for home mortgage and home equity interest has been modified. This deduction is limited to interest you paid on a loan secured by your main home or second home that you used to buy, build, or substantially improved.
Find out how the new changes affect you
So now you are probably thinking, that’s great, but how will this affect me? The best way to see how your taxable income has changed this past year is to use the IRS Withholding Calculator to perform a paycheck checkup.
It will help you to see if you have been having enough money withheld from your paychecks. If you are not having enough withheld, you could end up owing the IRS an unexpected tax bill and penalty! If you do a paycheck checkup and find that you are not having enough of your pay withheld, you may want to adjust your W-4 or pay estimated taxes throughout the year.
IRS publication for learning more about the tax changes
Still feeling a bit overwhelmed? You can learn more by reading the IRS Publication 5307, Tax reform Basics for Individuals and Families.
Free tax preparation in Johnson County
If you need help in preparing your income taxes this year, the Johnson County–K-State Extension VITA site opens at noon on February 6. We have expanded the number of volunteers this year and have a larger, more accommodating space for tax preparation.
We do not take appointments! All tax clients are seen on a first come basis. This service is for households with an earned income of $66,000 or less for 2019.
To obtain a list of documentation to bring to the site, Download VITA Checklist of what to bring with you.