Update: Tax refunds will go out even if the government shutdown extends into filing season, the Internal Revenue Service said late Monday (Jan 07, 2019).
The IRS plans to recall a “significant portion” of workers who have been furloughed during the shutdown to process tax returns. The IRS will start accepting tax returns on Monday, Jan. 28.
The shutdown could complicate what already will be a unique filing year that incorporates for the first time major changes to the tax code.
Here’s what you should know regarding the upcoming tax filing season…
3 big changes this year
*Bigger standard deduction: The standard deduction will nearly double for every filer from 2017: $12,000 for single and married taxpayers filing separately, up from $6,350; $18,000 for heads of households, up from $9,350; and $24,000 for married couples filing jointly, up from $12,700.
*Another substantial change is the doubling of the child tax credit to $2,000 per child from $1,000. Taxpayers also can claim a new $500 credit for adult dependents.
3 ways to get ready
*Gather documents: Print out a tax checklist and gather the documents as you receive them, such as W-2s from your employer and 1099s from your bank. Collect any receipts you plan to use to claim deductions for charitable contributions.
*Pull out old returns: Take out a copy of last year’s tax return to help jog your memory on what credits you claimed and deductions you made. This will help you note key changes in your life that may affect your taxes, such as marriage, divorce, a new house, a new baby or retirement.
*Anticipate changes: Use online calculators to help you anticipate your tax situation post-tax reform law. If you estimate you may owe Uncle Sam, you can still fund your IRA – until April 15 – to lower your 2018 taxable income.
NOTE: The tax deadline for filing will return to the traditional April 15.
Here are other important tax dates:
January 15, 2019: If you’re self-employed, fourth-quarter 2018 estimated tax payments are due.
January 31: Deadline for employers to mail out W-2 forms and businesses to send 1099 statements, which report non-employee compensation, bank interest, dividends and distributions from a retirement plan, and help calculate your total taxable income.
March 15: Heads up incorporated workers! Tax returns for LLCs and S-corps are due.
April 15: This is the last day you can file your taxes electronically or postmark your paper taxes.
VERSE: “Let everything that has breath praise the LORD” Psalm 150
QUOTE: “A person who loves his job, will never work a day in his life.”
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