2018 Tax Cuts and Jobs Act (TCJA) introduced many new changes to the tax code. If your head starts to spin at the mention of the word taxes, take a deep breath – this article will help you understand things more clearly.
Here’s a guide that breaks down the biggest changes to the tax code to help you figure out which ones might affect your 2018 returns. We’ve also got all the major deadlines listed so you won’t miss a beat.
Here are a few major changes to the federal tax code that may affect your 2018 returns:
7 Important Deductions Going Away
- Dependent and personal exemptions
- Interest on Home Equity Loans not used to build, buy or improve your home
- Mortgage Insurance Premiums (MIP)
- Exclusion for forgiven debt
- Miscellaneous itemized deductions—i.e. unreimbursed employee expenses
- Moving expenses
- Tax preparation and investment fees
New Deduction Rules
Taxpayers who itemize their deductions can only deduct up to $10,000 on a combination of the following:
- State income taxes
- Sales tax
- Local taxes
- Property tax (If you pay high property taxes you will feel these effects more. This is common in states like California and New York.)
Don’t Miss a Beat
If You Mail Your Return:
- Double-check your envelope to make sure it does not weigh more than 1 oz—tax returns without enough postage will be returned.
- If your envelope is postmarked by the deadline date, your return is considerd on time.
- To avoid returned mailings, print labels on your computer or neatly write both the destination and return addresses.
Stay on top of these important dates now so you’re not surprised later…
April 15 – Tax Day Deadline
Some USPS® office locations will be open late to postmark your tax return. Approved Postal Providers® do not offer late postmarking, so verify their last collection hours. If you file electronicly, file no later than 11:59 pm.
July – Paycheck Check-up
In July, ensure your withholdings are up-to-date and adjust if necessary.
October 15 – Extension Deadline
This is the last day to file your tax return if you received an extension from the IRS.
No one wants to hear the word ‘audit’ after tax time, but the audit selection process is totally random. Chances are slim that you’ll be selected, but it’s still important to stay sharp this tax season. Check out the stats in the attached graphic on who gets audited, and avoid the noted red flags to reduce your risk. If you’ve got more questions, let us know – We’ve got a referral for a great tax professional.
If you’re considering hiring a tax pro to help make sense of it all, call us! We have a great referral and can connect you.