Filing your taxes is rarely an enjoyable process, but the 2019 tax season is bound to be an even more complicated and confusing one than usual. For starters, the new tax reform signed into law at the end of 2017 applies to your filing this year, so there are numerous new laws and forms you need to learn. And, to complicate things further, this tax season is kicking off with a government shutdown—and that includes the IRS. With these difficulties and delays in mind, the IRS has offered the following 5 tax tips to help taxpayers prepare for this tax season.
Look at Your Paycheck Withholdings
When the tax reform laws went into effect in 2018, most people’s automatic withholdings dropped. You likely were not made aware of this, though you may have noticed that your paychecks got a little bigger. However, that also means you’re sending less money to the government with each paycheck, and that is going to impact your tax return. If you usually get a refund from the IRS, the amount you get this year could drop significantly; you might even end up owing a little. If you usually have some tax liability when you file, that number could go up.
The IRS recommends looking at your automatic withholdings now, and comparing them with the withholdings on last year’s checks, so you’re not surprised by the difference on your tax return. The IRS also has a tool that can help you to calculate if you’re withholding enough from your checks. The Paycheck Checkup calculator will tell you the right amount to withhold each month, so you can make any necessary adjustments by filing a Form W-4 with your employer.
Estimate Your Taxes Now
While most people don’t have all the necessary forms to file their full return just yet, the IRS suggests that you still input all the necessary numbers to get an estimate of how much you will owe (or how much of a refund you can expect). As we already mentioned, the new tax laws are going to have a big impact on most people’s returns, so having an estimate of your tax liability or refund can help you to properly prepare when it comes time to file.
You should also get an idea of when you might be able to expect your refund (if you’re getting one), so that you’re not surprised if there are delays. For example, those claiming the Earned Income Credit or the Additional Child Tax Credit shouldn’t expect to receive a refund until mid-February at the earliest. If the government shutdown drags on, those could be delayed even longer.
Check Your ITIN Expiration
For those who don’t have a Social Security number, but who are still required to file a tax return (this includes nonresident aliens, some resident aliens, and certain dependents or spouses), you should be filing using an individual taxpayer identification number (ITIN). If you’re using an ITIN to file your return, the IRS suggests checking the ITIN’s expiration date now. If it might expire before you have a chance to file, submit an application to renew it now, so you can avoid any potential problems with your return.
Familiarize Yourself with New Forms
The new tax laws have also modified a few of the tax forms that you may be familiar with, and it’s important that you become familiar with their new formats. The most common form that’s been changed is the Form 1040, which has been shortened to mimic Forms 1040-EZ and 1040A. However, it now requires some additional schedules that you might need to attach. As you get your taxes in order, take the time to look over the new version of Form 1040 and get familiar with it; this will make it a little less confusing when it comes time to fill it out and file.
Make a List of Resources
While you may have been able to handle filing your own taxes in the past, this year is going to be much more complicated. That’s why the IRS is recommending that all taxpayers take a little time right now to search out and make up a list of helpful resources they can turn to when they have questions—because, odds are, you will have questions this year. This could include online resources through the IRS website, or the Volunteer Income Tax Assistance program, if you qualify. Do some research, and know where you can turn for help when you need it.
The expert tax preparers at Biesinger & Kofford CPAs are always ready and willing to answer your tax-related questions, and help you in preparing your tax return. If you need professional tax services in Provo, contact us today to set up an appointment.