Get a Head Start on the New Tax Laws for the 2018 Season
The April 2019 deadline for filing your 2018 taxes probably seems far in the future, but if you start preparing for the filing process now, you’ll save yourself a lot of stress closer to the deadline.
Here’s a handy guide to the new tax laws, the paperwork you need, and the tips you can follow to ensure your 2018 tax season is headache-free.
Notable Tax Changes for 2018
Several changes in the 2018 tax code may affect the taxes you will pay. The adjustment of the seven tax brackets is one of the biggest changes. The rates are now lower, and the income amount for each bracket has shifted. This applies to both single filers and to married people filing jointly. What’s more, the significant increase in the standard deduction means if you usually itemize deductions, you might fall into the standard category.
Personal exemption has also been eliminated. Check the W-4 you filed with your employer to find out whether you need to update the withholding allowance to compensate for these changes. If too little taxes are being withheld, you will owe more at tax time, so it’s better to discover and correct this early on to reduce the impact on your taxes.
The Paperwork You Need
You’ve probably found yourself surrounded by piles of paperwork, scratching your head during past tax seasons. You need quite a few different documents to fill out your tax return and if you identify your required documents ahead of time, you’ll save time and stress come April.
Every taxpayer needs documents reporting income such as W-2 and 1099 forms or retirement account documents. You may need additional documents showing interest paid on expenses such as mortgages or student loans, property taxes paid, and money spent on medical expenses and health insurance premiums. You must also provide the social security number for each dependent you claim.
If you plan to itemize your deductions, you should save bank and credit card statements and records or receipts from any deductible personal expenses. Knowing which of your expenses to track now is key — you don’t want to learn too late that you should have been tracking a particular type of expense because it’s tax-deductible. Attempting to go back and locate receipts and records takes time and effort, and you may not find or recall everything months later during tax season.
Take the time to create a system for organizing your 2018 tax documents. When you get your filing system in order, it’s easier for you to remember which documents you need and where you keep them. You will also save yourself some hassle if you deliver your documents to your tax professional in one organized batch. This could reduce the chance that your files will be sent back to you because there are documents missing.
If you create a filing system now, it will likely work for you in future years with only minimal updates to account for changes in the tax code or your personal finances. Just imagine how glad you’ll be every tax season when you don’t have to sort through an entire year’s worth of disorganized documents and receipts.
Important Dates to Note
Your 2018 tax returns must be filed by April 15, 2019. Tax documents you are owed by other entities, such as W-2 forms from your employer, must be provided to you by January 31, 2019.
If you’re self-employed, you must also file quarterly estimated taxes on your earnings. Before the next tax season, make sure you’ve filed your quarterly estimated taxes by the following dates:
- First quarter: April 17, 2018
- Second quarter: June 15, 2018
- Third quarter: September 17, 2018
- Fourth quarter: January 15, 2019
Looking for the best way to file your 2018 taxes with confidence? Working with an experienced tax professional can help you navigate new tax laws and find every deduction you’re eligible for. If you owe a tax debt to the IRS or have been contacted by the IRS for an audit, it may be time to bring in a tax attorney. At Milikowsky Tax Law, our experts help you communicate with the IRS to manage audits and unresolved tax debt. Contact us today and enjoy peace of mind next tax season.