The Internal Revenue Service is now advising taxpayers of the new tax law changes . The standard deduction will double next year. Therefore,discouraging taxpayers to itemize on their return.
This is the sixth in a series of reminders to help taxpayers prepare for the upcoming tax filing season. The IRS has recently updated its Get Ready page with steps to take now for the 2019 tax filing season.
In previous years, about one out of three taxpayers itemized. Moreover, the IRS expects that number to be less for tax year 2018. The Tax Cuts and Jobs Act (TCJA) passed in December 2017, considerably affects deductions for taxpayers who normally itemize.
The Tax Cuts and Jobs Act ( TCJA)
The TCJA doubles the standard deduction amount for all filing statuses. The standard deduction is a dollar amount that reduces the amount of income on which a taxpayer is taxed and varies according to their filing status. Many qualifying taxpayers may find the increased standard deduction more than their total itemized deductions. In other words, they will more likely choose the standard deduction rather than itemizing.
Taxpayers should check their 2017 itemized deductions. It is important they understand what the tax reform changes could mean for their tax situation in 2018. Those who still plan to itemize will complete an updated version of Schedule A, Itemized Deductions, and attach it to their tax return.
Tax Reform Basics for Individuals and Families, is a key resource to understanding the impact of the tax reform law on deductions. The publication provides information about:
- increasing the standard deduction,
- suspending personal exemptions,
- increasing the child tax credit,
- adding a new credit for other dependents, and
- limiting or discontinuing certain deductions.
The IRS reminds taxpayers that the best way to file an accurate tax return is to use tax software and e-file or seek the help of a tax professional who will prepare and e-file their tax return. The IRS offers tips for choosing a tax professional.
Tax Shield Software is a professional tax software provider. Contact us at 855-507-1040 option #1 for Sales to find out more information. There’s still time to take advantage of the FREE tax software before the new season begins.