Are you starting on your 2018 tax return right now?
Your tax return may seem a bit off when you’re filing. The reason for this is the Tax Cuts and Jobs Act (TCJA) changes.
How about we find out how to e-file your taxes first?
For on the go taxpayers and those who just need a break.
If you have a hectic schedule or just want to relax at home after a long day, filing your taxes online could be the best option for you. No need for standing in long lines for a tax accountant (especially with the government shutdown happening right now).
All you need to do is follow these few steps:
- Create an account
- Enter your tax information (which is conveniently available by clicking user-friendly tabs for your personal information, income, deductions, and credits)
- Submit your account for e-file!
We’ll e-file your tax return as soon as possible. Keep in mind, taxpayers who have a refund for the 2018 tax year are not subject to any penalties at any point they decide to file. Just make sure you file within three years of the due date of your return to claim your refund.
However, taxpayers with a tax due to the IRS will need to file right away so they can avoid late filing penalties!
Check out the breakdown of the tax changes this year.
The following are no longer available for the 2018 tax year:
- Form 1040A and 1040-EZ
- Personal exemptions
- Job-related expenses
- Other miscellaneous itemized deductions
- AGI limitation for itemized deductions
- Home equity loan interest deduction
- Mortgage insurance premium deduction
- Nonbusiness energy property credit
- Qualified tuition and fees deduction
Here are the changes you should be aware of:
- The 2018 tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%
- The standard deductions are
$12,000 for single filers,
$24,000 for joint filers,
and $18,000 for the head of household
- The AGI threshold for medical expenses are back to 7.5%
- The Child Tax Credit (CTC) increases to $2,000 per child
- $1,400 is now the limit of the Additional Child Tax Credit (ACTC)
- The modified adjusted gross income (AGI) phase-out threshold for the CTC increases to $200,000 ($400,000 for joint filers)
- For other dependents who don’t qualify for the CTC, there is a new other dependent credit of up to $500
- Social security numbers (SSN) that are valid for employment are required for the CTC and must be issued before April 15, 2019, or October 15, 2019
- Businesses can deduct 20% of their qualified business income (QBI) from their qualified trade or business
- SALT deduction decreases to $10,000
- Alternative Minimum Tax (AMT) exemption amount increases to $70,300 ($109,400 if joint filers or qualifying widow(er); $54,700 if married filing separately)
- Phase out for AMT increases to $500,000 ($1,000,000 if married filing jointly or qualifying widow(er)
Six new schedules are introduced this tax season.
Although the sound of these schedules might overwhelm some taxpayers, just imagine it as the original tax return being smaller and split up into separate sections based on the TCJA tax changes.
Read below to find out how each schedule is organized.
If you have additional income or adjustments to income like capital gains, rental real estate, unemployment compensation, or deductions for your student loan interest, educator expenses and the deductible portion of your self-employment tax, you will find this information on Schedule 1.
On the other hand, if you owe Alternative Minimum Tax (AMT) or those who are required to make an excess advance premium tax credit repayment, you will be using Schedule 2.
For non-refundable credits such as the foreign tax credit, child and dependent care expenses, education credits or retirement savings contribution credits, you will be using Schedule 3.
If you owe other taxes such as the health care individual responsibility penalty, self-employment tax, household employment taxes, additional taxes on retirement plans, or the repayment of first-time homebuyer credit, you will find your information on Schedule 4.
For other payments and refundable credits such as the net premium tax credit, 2018 estimated tax payments, or the amounts paid with your extension to file will be reported on Schedule 5.
Lastly, foreign addresses and third party designees will be reported on Schedule 6.
Be the early bird this tax season.
Now that you know what your tax return will look like, how about starting your 2018 taxes?