There are important changes that you need to know before the 2019 filing season begins. The IRS has created a couple very helpful resources to help you prepare to file your tax returns timely and accurately next year.
IRS.gov/getready provides information about issues and actions you can take now to be ready to file your 2018 tax return and avoid tax surprises. In addition to news releases that will be issued through the end of the year, IRS developed a new Publication 5307, Tax Reform Basics for Individuals and Families. It’s available on IRS.gov/getready to help you learn about how tax reform may affect your tax return.
Along with lowering the tax rates, some of the changes in the law that affect individual taxpayers, like you and your family, include:
- increasing the standard deduction,
- suspending personal exemptions,
- increasing the child tax credit,
- adding a new credit for other dependents and
- limiting or discontinuing certain deductions.
The Get Ready campaign covers several key areas in addition to tax reform that affect different taxpayer groups. Some taxpayers must renew an expiring Individual Taxpayer Identification Number. And, if you are using a tax software product for the first time you will need your adjusted gross income from your 2017 tax return to validate an electronically filed tax return.
Moreover, if you claim and qualify for the Earned Income Tax Credit or the Additional Child Tax Credit, you may experience a refund hold. By law, the IRS cannot issue refunds before mid-February for tax returns claiming EITC or the ACTC. This applies to the entire refund, even the portion not associated with these credits.
You may receive a smaller refund - or even owe an unexpected tax bill – when you file your 2018 tax return next year, especially if you did not adjust your withholding this year after the withholding tables changed. Perform a paycheck checkup to avoid an unwelcome surprise at tax time. For more information on making estimated or additional tax payments, visit the Pay As You Go, So You Won’t Owe webpage.
For more information check out How the Tax Cuts and Jobs Act Affects Businesses