The 2019 Tax Filing Season Will Be Like No Other!

As if the Tax Cuts and Jobs Act (TCJA) wasn’t enough to make the 2019 tax filing season complicated, add a government shutdown to the mix and we are in for an unprecedented filing season!

What can you expect when filing your 2018 tax return? For starters, there might be a possible filing delay. Although the filing season officially begins on January 28th, not all the tax forms and schedules have been finalized for changes related to the TCJA. The partial government shutdown could delay the IRS in finalizing these forms, which means some may not be able to file right away. State taxing authorities will also face similar issues finalizing their forms.

Secondly, taxpayers will see a new Form 1040 for 2018. The new form is condensed, making it easier for simple filings, but not exactly as small as the “postcard-sized” originally promised, given the six new schedules. We expect individuals with somewhat complex filings to face challenges navigating the new forms.

The TCJA lowered tax rates, so the amount of federal tax withheld from paychecks decreased in 2018. That, coupled with the elimination of personal exemptions and limitations on certain itemized deductions, could result in smaller refunds, and some may even owe! However, with the higher standard deductions, larger child tax credits, and the new 20% qualified business income (QBI) deduction, others may see a boost in their refunds.

Lastly, after the dust settles on this first year under the new tax law, many will benefit from tax planning in 2019 and beyond. For some, it may be as simple as adjusting payroll withholdings or estimated tax payments to prevent owing penalties and interest next year. For others, especially those who are eligible for the new 20% QBI deduction, tax planning may be more complicated and time sensitive. Give us a call to schedule a meeting on how you can be better prepared under the new tax law.

About Padgett Team

Our firm is a leader in outstanding accounting, tax payroll and business services. Our dedication to the 3 dominating business requirements of Professionalism, Timeliness and Excellence dictate the day-to day service we provide equally to each client. No small business is too small.

Facing a Tax Audit?
We can Help! Don't Delay!
Contact our Enrolled Agents today!!