Here are some important things you need to know about the 2018 Tax Act!

CHANGES TO INDIVIDUALS:
-Increased standard deduction Single: $12,000, Head of Household: $18,000, Married Couples: $24,000 
-No more personal exemptions.
-Child Tax Credit doubled to $2,000 for each child 16 & under.
-Moving expense deduction has been eliminated.
-Misc.deductions that have been subject to a 2% limitation are no longer deductible, i.e. non-reimbursed employee business expenses.
-Created a $10,000 limit for the amount of state income tax & real estate taxes that are deductible on the federal return.
-Any mortgage interest expense over $750,000 is no longer deductible.
-Medical expenses remain intact as an itemized deduction.
-Education credit & Capital Gains provisions in the tax code basically remain the same.

CHANGES TO BUSINESSES:
The new tax law passed gave tax breaks specifically for regular corporations where their tax rate was reduced from 35% to 21%. To make it more fair, they created a 20% deduction to assist s-corps, sole proprietors, & partnerships to make the tax more comparable to what the regular corporations will be paying at 21%.

​Please give us a call at 435-654-2053 & we can help you with all the new requirements or with any tax questions you might have!

For fiscal year 2015, Congress approved a $10.9 billion budget for the IRS.  This is a cut of $346 million from 2014 and this budget is the lowest since 1998 (inflation considered).  What should we expect?

The Enforcement cuts of approx $160 million will equate to fewer audit & collection cases.  Reduced staffing in enforcement will result in at least 46,000 fewer individual & business audit closures and more than 280,000 fewer Automated and Field Collection case closures.  The IRS will lose 1,800 enforcement personnel through attrition in 2015 and due to the hiring freeze, the IRS will not be able to recoup these employees.  The bottom line will be that the government will not be able to collect at least $2 billion in revenue that would have otherwise been collected.


Overtime & temporary staff hour cuts will create a $180 million cut.  The impact of this will be delays in refunds for some and those that file a paper return will see a delay of an extra week or longer to see their refund.  Accounts Management and taxpayer correspondence will face lengthy delays.  The delays over the phone and in person will further diminish – which means that fewer than half of taxpayers trying to call will actually reach an IRS employee on the phone and those will face extended call wait times.


Another impact of IRS budget cuts will be delays to critical IT investments of more than $200 million.   These cuts will impact taxpayer services such as increased protections against identity theft and the overseeing of taxpayer hardship cases.  Aging IT systems won’t be replaced and this creates a bigger difficulty for IRS workers to do their jobs accurately & efficiently.

The IRS will begin accepting e-file tax returns on January 20, 2015 for the 2014 tax year.  The biggest change with tax preparation this year comes with the implementation of the Affordable Care Act.  

How will this affect your tax return?  For those that had health insurance coverage in 2014, you should receive a form 1095 in the mail from your private Health Insurance Carrier or from the Health Insurance Exchange.  It should detail the amount of health insurance premium that you personally paid in 2014.  You will need to save this form for tax preparation.

For those that didn't have health coverage in 2014, in most cases, there will be a penalty calculated on your tax return.  Each penalty will be specific to individual circumstance and is determined by a calculation.  For 2014, it is $95 for each adult and $47.50 for each child that you claim on your tax return OR 1% of your taxable income up to a maximum amount—and whichever of these amounts is GREATER will be the penalty on your tax return in most cases.  For those cases, where individuals had partial year coverage, the calculation for the “no insurance” penalty is quite complex.  

The biggest surprise to tax payers will most likely come to individuals that “underestimated” their 2014 income when signing up for 2014 health coverage.  Those taxpayers may end up owing the IRS more money for their “health coverage.”  What will your return look like this year?  I would love to take the time to sit down with you & answer any questions you may have about your individual situation and see how I can help ease your tax burden!