New tax laws may affect the way you file your return
The Internal Revenue Service or IRS is set to begin its tax season on Monday, January 28th, and with it comes some significant changes as the "Tax cuts and Jobs Act" goes into effect.
The new tax refund 1040 form is now just a two-page form with attached schedules. This has caused many people to have a list of questions and concerns.
Diana Jacobsen, a master tax expert, said this has been the largest tax reform act since 1986 when President Ronald Reagan was in office.
Jacobsen says the new tax laws will change the way people itemize deductions and file for returns.
She warns people to look at how much was deducted from their paychecks in 2018.
Jacobsen said, “The tax rates have been lowered, so if people can plan ahead and we did work with our clients last year to revise W-4’s so that they weren't caught by having less withheld from their paychecks."
Other changes include doubling the standard deduction to $12,000 for single taxpayers and $24,000 for joint filers. According to Jacobsen, this helps married couples.
If you have children, the child tax credit also doubles this year to $2,000 per qualifying child.
Jacobsen said, "Anyone who has earned income credit or additional child tax credit. The IRS is reviewing those returns and not releasing refunds until February 15th, so they'll be experiencing the same delays they have been for the past two years."
Jacobsen says the new tax laws help families and small businesses.
Jacobsen explained, "Qualified businesses get to have a 20% deduction of their net income without having to have any receipts, so they're giving the small businesses a break."
The IRS says it plans to process returns and issue refunds on schedule, but the full impact from the partial government shutdown remains unclear.
Experts advise people to file sooner rather than later.
H&R block also advises people to be cautious of identity theft saying this is a time where it sees a spike in cases.