If you’re anticipating a refund, you may be wondering when you can reasonably assume it will come so you can plan your finances and spending in a timely manner. There are usually some tells for a rough estimate when you’ll be getting it. But new rules and laws – not to mention the fact that the government is currently shut down – have thrown everything into more chaos than usual.
The 2018 tax filing season begins in late January 2019.
The passage of the Tax Cuts and Jobs Act means some stark changes for tax filers and the deductions they can take.
One of the most notable changes is the increase in standard deductions for individuals and married households.
Tax filing season is only a couple months away. With the passage of President Donald Trump’s Tax Cuts and Jobs Act last year, filling out your tax forms might require a different strategy than what you’ve used in previous years. Here’s a breakdown of some of the more notable changes you need to consider for the 2018 tax filing season, including multiple deductions that are now kaput.
The Tax Cuts and Jobs Act did not eliminate the tax deduction for charitable gifts, but the new tax laws have changed some of the rules.
The Internal Revenue Service issued proposed regulations today for a new
provision allowing many owners of sole proprietorships, partnerships, trusts and S corporations to
deduct 20 percent of their qualified business income.
The new deduction — referred to as the Section 199A deduction or the deduction for qualified
business income — was created by the Tax Cuts and Jobs Act. The deduction is available for tax
years beginning after Dec. 31, 2017. Eligible taxpayers can claim it for the first time on the 2018
federal income tax return they file next year.
The deduction is generally available to eligible taxpayers whose 2018 taxable incomes fall below
$315,000 for joint returns and $157,500 for other taxpayers. It’s generally equal to the lesser of 20
percent of their qualified business income plus 20 percent of their qualified real estate investment
trust dividends and qualified publicly traded partnership income or 20 percent of taxable income
minus net capital gains.
Deductions for taxpayers above the $157,500/$315,000 taxable income thresholds may be limited.
Those limitations are fully described in the proposed regulations.
Qualified business income includes domestic income from a trade or business. Employee wages,
capital gain, interest and dividend income are excluded.
The IRS encourages everyone to use the Withholding Calculator to perform a quick “paycheck checkup.” This is even more important this year because of recent changes to the tax law for 2018.
Standard deduction amount increased. For 2018, the standard deduction amount has been increased for all filers, and the amounts are as follows.
According to the IRS, 20% of income tax returns prepared on paper have mistakes, and mistakes can lead to overpaying taxes. Only about 1% of electronically prepared returns have errors.
You can get quotes and compare costs, but bear in mind that cost is not the only consideration. Here are some other things to think through:
The EFILE service will stop accepting transmissions of your clients’ 2013, 2014, 2015 and 2016 initial (T1) personal income tax and benefit returns and 2015 and 2016 amended T1 returns through the ReFILE service at midnight (Local time) on Friday, January 19, 2018. Both services will re-open on Monday, February 26, 2018 at 8:30 a.m. (Eastern time) for the electronic filing of your clients 2014, 2015, 2016 and 2017 initial (T1) personal income tax and benefit returns and 2015, 2016 and 2017 amended T1 returns.