Tax season is just a couple of weeks away and that means that it is time for taxpayers to start preparing. The Internal Revenue Service (IRS) has officially announced that come Monday, January 27, 2020, they will be ready to process 2019 tax returns. Tax filers must file by the April 15th deadline and should be prepared to adjust to a few new changes this year.
This year, you should be aware of the following main changes for 2019 taxes:
- Schedule A Forms: the 2018 tax filing year required six schedule A forms for those who chose to itemize instead of taking the standard deduction. After complaints across the board, the number of schedule A forms has been reduced to three.
- Alimony: anyone who had their divorce finalized during the 2019 year and beyond will no longer be able to take a deduction for alimony paid and will no longer be able to claim alimony as income. For those who finalized their divorce prior to December 31, 2018, the old rules will still apply.
Those are the two major shifts in the tax filing standards and the rest is largely the same as the 2018 tax filing year. The IRS has announced that it anticipates that over 150 million individual tax returns will be filed for the 2019 tax year. In addition, they predict that the majority of those returns will be filed prior to the April tax deadline.
Being Prepared for the Tax Deadline
Stress and dread are two of the most common emotions surrounding tax season. While filing taxes may seem like a massive burden, the reality is that tax season can be pain-free with the right preparation strategy and the right professionals helping you out. Being organized is paramount to a successful tax filing.
One of the biggest mistakes that filers make is assuming that their straightforward financial situation means they can file last minute. No matter how simple you think your taxes may be, keeping your finances in order and up-to-date is critical. Planning ahead means gathering all of the appropriate documents now, not in April.
According to IRS Commissioner Chuck Rettig, taxpayers should fear not. Stating, “As we enter the filing season, taxpayers should know that the dedicated workforce of the IRS stands ready to help. We encourage taxpayers to plan ahead and use the tools and information available on IRS.gov. The IRS and the nation’s tax community are committed to making this another smooth filing season.”
It is also worth noting that the IRS has partnered with private-sector tax preparation companies to offer free electronic filing options. Through the IRS Free File program, taxpayers with low to moderate incomes will be able to e-file with no cost to them. Taxpayers must go to the IRS website to determine which companies are participating in the Free File program.
At Ellrich, Neal, Smith & Stohlman, P.A., our tax planning service goes far beyond filing a tax return. We assist new businesses with basic ownership options and tax consequences and guide growing businesses through year-end planning and projections. We offer a broad range of consulting services that include evaluating material transactions, mergers and acquisitions, international taxation strategies, and estate and trust planning. Contact us today to learn more!