Get your paperwork together because tax season is here and some major changes in the new tax code are making most taxpayers change their strategy.
Sean McGuire, an accountant with Brennan and Company in Palm Desert, said being prepared for the alterations is key.
“Gather your W2’s, your 1099’s, mortgage interest statement, property tax statement, if you own a small business, your profit and losses,” McGuire said.
McGuire highlighted the most notable changes:
-standard deduction doubled
-exemptions wiped out
-an increased child tax credit
-tax rates reduced
According to CNBC, we now have a cap on state and local tax deductions of $10,000. Also, the child tax credit went from $1,000 to $2,000.
Plus, itemized deductions are being limited or going away. For example, miscellaneous deductions like writing off tax prep fees are no longer an option.
One thing that stayed the same, the dates. The starting date was January 28th and the due date is March 15th for any corporate or LLC’s and April 15th for individuals.
Some claim tax returns might be delayed to the government shutdown but the IRS insists it won’t be an issue.
“We can’t confirm that yet,” McGuire said about the possible delay.
Taxpayers can use Free File if they make $66,000 dollars or less. Other options are tax prep software or authorized professionals.
McGuire said a lot of his clients send in their paperwork over email and never step foot in his office. Others feel more comfortable meeting in person, which he recommends for business owners with a complex tax situation.