The Tax Cuts and Jobs Act signed into law in late 2017 has been advertised as the most significant change to the U.S. tax code since the Reagan era. Whether or not that is true, the law means different things to different people as we start 2019. If you are required to file federal and state tax returns, some of the changes in the 2017 law will affect you in 2019.
Dallas-based Gurian PLLC, a CPA firm offering both business and personal tax services, recommends working with a CPA if you find that your tax situation has been complicated by the passage of the Tax Cuts and Jobs Act. Otherwise, it is wise to use a well-known tax software product or have your taxes done by a professional preparer.
If you still want to do your taxes yourself, here are some tips to keep in mind:
1. Hold Off for Now
At the time this post was written, the federal government was still in partial shutdown. You might want to hold off on filing your taxes if the shutdown is still ongoing. Why? Because certain changes to federal tax forms still haven’t received IRS approval. It would be a shame for you to prepare your taxes now only to find that approved changes require you to do them over. Your taxes aren’t due until April 15, so you can afford to wait a little bit.
2. Prepare for a Delayed Return
The government shutdown notwithstanding, IRS policy normally dictates delaying refund checks in order to combat fraud. Do not expect to get your refund right away. Whether you are receiving your refund via direct deposit or a paper check, it’s going to be delayed by a few weeks. This is something to work into your plans if you’re counting on a refund to pay bills.
3. Examine Your Withholding
Tax reform has eliminated the personal allowance while at the same time doubling the standard exemption. This may have a profound impact on the size of your refund in 2019. So pay attention. If your refund is excessively large, you are paying too much into the system. Adjust your withholding for 2019 so that you are giving the government less money.
If you file your taxes and discover that you owe, not enough is being withheld from your pay. Adjust withholding accordingly so that you don’t run into the same problem in 2020. If you’re interested, the IRS has a free tool on its website to help you figure out if your withholding is correct. You can adjust your withholding for 2019 by filing a new W-4 form through your employer’s HR department.
4. Get Your Documentation Ready
Lastly, you can eliminate some of the headaches of tax season by getting all your documentation ready before actually preparing your taxes. That means getting W-2s from employers (and 1099s if you are self-employed), mortgage interest statements from lenders, capital gain and loss statements from investment brokers, etc.
Of course, you are going to need all the documentation if you plan to have a tax preparer or CPA handle your taxes for you. It’s best to have all the documentation during your first sit down. Otherwise, your preparer or CPA may not be able to get started.
Tax season is upon us once again. It doesn’t have to be miserable, but that all depends on how you approach tax preparation and filing. Consider hiring a CPA offering personal tax services if you’ve had past problems. Remember, 2019 could be particularly confusing thanks to all of the changes implemented by 2017 tax reform.