You have probably already given up on your New Year's resolutions, so why not rekindle some enthusiasm by filing your taxes before the April 15 deadline? Do not procrastinate — especially this year, as there is a new tax code and political uncertainty overshadows every government agency, including the IRS.
Last year, the Tax Cuts and Jobs Act was passed, overhauling the existing tax code. Accountants have warned that this new filing system could complicate your tax filings this year. Here is what you need to be aware of when filing your taxes in 2019.
File as soon as you have all your information
All taxpayers, whether expecting a refund or having to write a check to the IRS, should file as soon as they have all their information. Full-time employee? Most employers have already mailed out W-2 forms, so keep an eye on the mail. The W-2 details earnings, retirement plan contributions and taxes withheld. Freelancers and independent contractors, you should have received your 1099 MISC by January 31.
- Apart from your W-2, you may need other forms including 1099-B, 1099-G and 1099-K.
- If you are unsure about forms or fear some are missing. call 1-800-TAX-FORM (1-800-829-3676), a free IRS hotline.
- Independent contractors need to file the 1099-MISC form.
There are changes to the tax law system
The standard deduction has been doubled, to $12,000 for singles and $24,000 for married couples. What is the standard deduction? The standard deduction is the dollar amount non-itemizers may subtract from their income before income tax is applied. Personal exemptions have been removed altogether.
You'll probably notice the new 1040 has been streamlined.
- The new 1040 is simpler and will replace older simplified forms, such as the 1040A or 1040EZ.
- Personal exemptions have been removed, so hang on to your old receipts.
- There is a new $10,000 cap on itemized deductions.
How to file
You will have three options on how to file your taxes. If you earn under $66,000 annually, you can file for free with the IRS directly. You can also use tax prep software to file your taxes yourself, or use an authorized professional.
It is recommended that you file electronically, it is usually easier to track refunds and filing status.
- Check IRS.gov for tax prep software recommendations.
- You can file for free using IRS Free File.
- Hire a professional. Learn more about what to look for here.
Filing opened January 31. File as soon as you can; the recent government shutdown, coupled with the new tax code, may complicate tax return processing by the IRS, but the sooner you file, the sooner you can get your refund.
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