The New Federal Income Tax Form May Surprise You

The best way to get ready to do your taxes – or even have them pay – is to take a deep breath, put your thoughts together, and start fighting for your papers.

Your 2018 federal income tax return will be very different from what you’ve seen in the past. We’re looking at a wide range of major changes – and many trigger threads – under the new tax law.

But a few smart first steps can help you fight anxiety and pay your taxes.

The tax deadline is April 15. The earliest the Internal Revenue Service will accept the returns is January 28.

Before you even think about trying to figure out the new tax rules, try to remember what’s new in your own life. Did you have a baby in 2018? Buying a new home? Get a new job? Withdraw?

New things in your life last year could mean a whole new paperwork this year when it comes to your taxes. Here’s a quick to-do list:

1. Take a copy of last year’s tax return

Of course, the tax rules have changed dramatically and we have a Form 1040 with a new look.

But your old return for the 2017 tax year can be a roadmap to making sure you’ve gathered all the documents you need to file your 2018 tax return.

Maybe you took a new job in March or April? Do you have two W-2 forms? That of your current job? What about the W-2 you need from the old job you’ve been working on for a few months?

Cathy Anderson, owner of Anderson Financial Services in Fraser, said filers often only show up with a W-2 when they’ve changed jobs in a year. Some forget to look for the old work papers. You need it.

Your old 1040 might remind you that you still don’t have the latest 1099-DIV from a mutual fund to report dividends and capital gains. Or maybe you don’t have a 1099-INT from a bank account yet.

2. Find valid social security numbers, ids

Make sure you have the correct social security numbers for you, your spouse, and your children. Did you have a baby in 2018? You need the newborn’s social security number for your tax return.

Also take your driving license. Some tax preparers will ask you for a driver’s license or state identification number to prove that you are who you say you are.

Additionally, some states will reject an electronic file on a state return if you do not submit driver’s license or state ID information. The states that currently require driver’s license information are: Alabama, Connecticut, New Mexico, New York, and Ohio, according to the American Institute of CPA.

Not all states had yet released their 2018 tax forms as of Jan. 16, so more states could be added to that list later, the American Institute of CPA has warned.

Many states request, but do not require, such information, which can be entered by tax professionals through the tax software they use. States that request credentials include Louisiana, Vermont, Virginia, and Illinois.

The New York State Department of Taxation specifically addresses the situation where a taxpayer refuses to provide identifying information. The ministry said the tax preparer should “check the box indicating that the taxpayer has neither and keep contemporary notes regarding the good faith effort to collect the client information , if we had to ask ”.

TurboTax, for example, will ask for information about your driver’s license or state ID depending on the rules in each state.

TurboTax also has a new feature this year that allows new customers to start their taxes by scanning their driver’s license barcode to quickly upload your name, address and date of birth without tedious data entry, according to a spokesperson. by TurboTax.

3. See if you can deposit for free

The IRS site offers a “Free File” program that allows taxpayers, based on their income, free access to branded tax products to prepare and file a federal tax return for free. The program, which includes 12 partners, would have been made more consumer-friendly to reduce some external marketing efforts.

Free Tax File software is available if your adjusted gross income was $ 66,000 or less last year. Some program participants also offer free federal and state tax preparation to certain filers.

For taxpayers who earn more than $ 66,000, free forms to fill out are available, as an electronic version of the paper IRS forms. These free forms are available when the IRS tax filing season begins on January 28.

See irs.gov/freefile.

New consumer protections include:

To use Free File, taxpayers must use the IRS.gov site. In some cases, a registrant may not be eligible for a specific company’s offer in the Free File program. But the new deal requires businesses to provide taxpayers with an easy way to return to the IRS site to see if they qualify for a company’s Free File program.

Several big names are participating in the program, including TurboTax, H&R Block and TaxSlayer.

TurboTax, for example, notes that it offers its TurboTax Free File program through the IRS site to taxpayers with adjusted gross income of $ 34,000 or less, active military personnel with adjusted gross income of $ 66,000 or less, or to those who qualify for earned income. Tax credit.

H&R Block offers its free files program through the IRS site to those with adjusted gross income of $ 66,000 or less and your age between 17 and 51, or you qualify for the tax credit on earned income, or you are in the military with adjusted gross income of $ 66,000 or less. H&R Block offers a free file of a state return, if you qualify for the federal return.

4. Take the time to review a checklist

If you work with a tax professional, you may receive a checklist in the mail or by email.

Some sites, such as H&R Block, also provide a checklist that anyone can use to determine the information they need to complete a tax return.

Consider things like: a 1099-G if you received unemployment benefits, which are taxable; a Form 1098 for your mortgage interest statement; retirement income documents, such as a 1099-R.

If you are collecting Social Security benefits, watch out for the SSA-1099, which is posted every January in January so that you know how much Social Security income you have to report on your tax return.

An SSA-1042S is sent to non-citizens who live outside the United States and who received or repaid Social Security benefits last year.

If you currently live in the United States and need a replacement form SSA-1099 or SSA-1042S, the Social Security Administration allows you to go online and get an instant, printable replacement form with a my Social Security account on www.socialsecurity. gov / myaccount.

A replacement SSA-1099 or SSA-1042S is usually available for the previous fiscal year after February 1. The Social Security phone number is 800-772-1213.

5. Know your bank account information

Check your bank account number and routing number three times if you want your tax refund to be directly deposited into your account.

Many headaches can be avoided if you make sure you enter the correct number.

If the IRS accepts your tax return and is unable to directly file your refund, the IRS will mail your refund check to the address listed on your tax return. There is no way to change your banking information after the IRS accepts your electronic tax return.

If the IRS rejects your return, you may be able to make the correction to your banking information before resubmitting your tax return electronically.

Generally, you will get your refund faster by using direct deposit. Direct deposit also helps avoid the risk of a tax refund check being lost, stolen, or returned to the IRS because the post office said it could not be delivered.

The IRS reminds taxpayers that they should not deposit refunds directly into accounts that are in their name, their spouse’s name, or both if it is a joint account.

Contact Susan Tompor: stompor@freepress.com or 313-222-8876. Follow Susan on Twitter @Tompor.


Source link

Comments are closed.