Tax Time Tips for Easy Filing 2018

Filing for your 2017 taxes opened January 29, 2018. This year, you have a couple extra days, since the IRS extended the tax deadline to April 17. The 15th falls on a Sunday, and since Emancipation Day on April 16 is a holiday in some places, you won’t need to file until Tuesday. There’s a very good reason to get a quick start and file early this year. The major data breach surrounding the Equifax hacking may have released enough information to cause tax fraud cases to skyrocket. All the information you need to complete your return should be on its way to you by now.

Delayed Refunds

Even if you file early, you may need to wait for refunds if you claimed the earned income tax credit or the additional child tax credit. Refunds involving those tax credits won’t be issued until the end of February, no matter when you submit your return. This is a step taken by the IRS, preventing fraudulent claims from being paid out. The tax agency cited the need for more time to detect false returns.

Tax Cuts and Jobs Act

While most provisions put forth in this legislation don’t apply until the 2018 tax year, there’s a change to claiming medical expenses that applies to your 2017 taxes. Previously, you could only deduct medical expenses that exceeded 10% of your adjusted gross income. The threshold drops to 7.5% for the 2017 tax year. You can start deducting sooner, if you’ve saved your medical expense receipts.

Income Reporting

If you’re employed and your entire income can be accounted for on a single W-2, you’ve got a simple tax picture, and you should have received your W-2 by now. If you have other income forms arriving, you can except to receive these forms in January:

  • The SSA-1099 Social Security income
  • 1099-R IRA or retirement plan distribution
  • 1099-MISC rental or non-employee income
  • 1099-K credit card payments for sharing economy income
  • 1099-G state and local tax refunds

As well as these forms, some will arrive between January and mid-February. These include:

  • 1099-B stock sales and capital gains
  • 1099-DIV dividends paid
  • 1099-INT interest earned
  • 1099-SA health savings account distributions

Form K-1, for the partner’s share of income, deductions and credits may not arrive until the business’s extended tax filing due date.

Other Forms

Some of the other forms you may need to complete your return arrived within the 2017 calendar year or as late as January 2018. These forms include:

  • 1098 Mortgage interest
  • 1098-E Student loan interest paid in excess of $600 (this form may be available online)
  • 1098-T Tuition and education costs
  • Annual Giving statements for the size and date of your charitable donations within 2017
  • Property tax statements, typically arriving in late 2017 or into early January
  • Childcare expenses may be requested from your childcare provider

Changes to Alimony

In the 2017 tax year, if you’re paying alimony to your ex, it remains a deduction from your gross income. Your ex must also claim this amount as an addition to their taxable income. This changes for divorce or separation agreements entered into after the end of 2018, however. Alimony assigned in these agreements is no longer deductible in future tax years.

Free File

An estimated 70% of the nation’s taxpayers have a 2017 adjusted gross income under $66,000 and are eligible for the IRS Free File program. You can file your taxes using Free File’s no-cost tax preparation software that also handles the filing chores when you’re done with preparation. Free state tax return options are included, and there’s a lookup tool to help you locate to find both federal and state free tax return options. The IRS arranges tax preparation offerings from their partners. You simply identify the best match for your circumstances, then you’re directed to that partner’s website to start your return. Even if you don’t qualify for free tax preparation software, you can still use Free File Fillable Forms, electronic versions of the forms you need.

About Paul Gaulkin CPA

Paul Gaulkin is a Certified Public Accountant and enrolled with the U.S. Treasury to practice before the IRS. Mr. Gaulkin possesses unique technical knowledge in the process of securing relief for taxpayers nationwide with IRS and State tax problems. With an accounting degree from Florida International University, he is able to transform complex tax and accounting problems into easy to understand solutions.

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