Monday, January 27th, marks the beginning of tax season. It’s the day the IRS will begin accepting returns for 2019.
Here’s what you need to know before you file.
Whether you’re self-employed, filing for businesses or personal taxes, it can be a very overwhelming process. That’s why professionals advise making a checklist before you begin.
Preparing W-2 forms, 1099’s and other tax-related documents in advance is the best bet. the sooner you file, the sooner you can expect cashback.
“So that you don’t have to file an amendment on your taxes. Once it’s finally sent, it’s actually accurate,” said Tabetha Phillips, a tax professional with Smart Tax.
She suggests to first make note of the recent Tax Cut and Jobs Act adjustments.
“Although the tax rates have reduced for each income tax bracket, it seems as though people are paying a little bit more in taxes even though the rates have decreased. That new W-4 that’s coming out, should help people become more precise and accurate on the withholdings that they take out,” said Phillips.
Small businesses should also take a look at the Qualified Business Income Deduction.
“It means that you would only be taxed on, say if you had, a net profit of $100,000, you would then only be taxed on $80,000 dollars. So basically, $20,000 would automatically be deducted you would not have to pay taxes on,” she added.
Corporate Returns Tax Rate, Standard Deduction Increase and Child Tax Credit are now available as well.
“Child Tax Credit is now $2,000. That use to be $1,000 per dependent,” said Phillips.
She adds that another big change is that you can claim and receive credit for “other” dependents.
“Let’s say once they turn 17, you lose the Child Tax Credit. That’s where the other dependent credit comes in. That’s an additional $500 for each person for your tax return if you have additional remaining taxable income.”
Keep in mind you can always submit your return early –but you don’t actually have to pay that tax bill until the April deadline.
Smart Tax also has a mobile app you can download to file taxes remotely. Click here, for more information.
Louisiana taxpayers can file electronically through Louisiana File Online, the state’s free web portal for individual tax filers. State income tax returns and payments are due May 15th.