Although the tax deadline has come and gone, it is still important to keep yourself up to date on all the tax changes that have occurred so you can make the most of it when filing your return. Some of the biggest changes in our tax law happened in December of 2017 and have affected the way people will file their taxes until 2025. If you aren’t up to date on the recent tax laws that have gone into effect or you have yet to file your 2018 tax return and want to know how it will change the way you file, then keep reading as this article highlights some of the changes that could affect you.

Recent Tax Changes

Let’s start with some of the major tax changes that have occurred that could have altered the way that you previously had filed your tax return:

  • The 1040EZ and 1040A forms no longer exist, and moving forward, all taxpayers are required to use a 1040 form.
  • The child tax credit has increased. This means that the maximum credit that most taxpayers would receive back in 2017 was $1,400. The credit has now increased to $2,000.
  • Qualified business income deduction. A qualified domestic business may now deduct up to 20% of their qualified business income from their business, plus 20% of qualified real estate investment trust dividends and qualified publicly traded partnership income.

Double-check your withholdings

Because of lower taxes and higher deductions, it is strongly suggested that workers do a withholding check-up to ensure that they are withholding enough taxes from their paychecks. Employees can adjust their withholdings by utilizing a W-4 form, a document you can request from your employer, to make sure they adjust the amount of income tax withheld from their pay.

Tax-deductible expenses

With the new tax law changes come changes in tax-deductible expenses that can be itemized. Note that far fewer taxpayers will want to itemize their deductions under the new tax law due to the increase in the standard deduction. For those who believe that it may still be beneficial to, here is a list of common documents you will need in order to see if it would be more beneficial to itemize:

  • 1098-Mortgage interest and property taxes paid
  • Statements from charities reporting contributions
  • Medical and dental expenses
  • State and local income, sales, and personal property taxes paid

Tax laws are ever-changing, and it is important to make sure that you are keeping up with any new tax changes that may occur. Some of the largest tax changes highlighted had to do with certain forms no longer being valid, the childcare credit increasing, changes in deduction and taxpayers having to double-check that they were withholding correctly. For those who struggle with understanding the new tax laws and need assistance with filing for next year, there are tax resolution firms that can assist with filing to ensure you stay compliant with the IRS.

 

The content contained on this page is strictly for informational purposes and may not apply to your specific situation. We recommend you consult with a tax professional to evaluate your unique situation. Forward Tax does not provide tax, bankruptcy, accounting or legal advice.

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