Any accounting, business or tax advice contained in this post is not intended as the complete answer to any personal tax questions you may have. We would be pleased to perform an individual analysis of your tax situation .and provide you with a detailed written analysis. This would be an engagement separate from the preparation of your tax return for the purpose of compliance with your tax filing responsibilities and may help you to avoid unnecessary tax liability for the 2019 tax year. Alert us of your interest in such a service and we’ll prepare a separate engagement letter to prepare your personalized report.
We will prepare your personal tax return without you ever having to leave the house. Simply email us your W-2s and other pertinent information. We’ll do the entire interview by phone and you’ll have your choice of having your completed tax forms mailed to you or you may chose to e-file. Avoid an uncomfortable trip to your tax preparer and enjoy the convenience of getting your taxes done without leaving home.
Free Information for the 2018 Tax Year
Form 1040 is used by U.S. taxpayers to file an annual income tax return.
For Tax Year 2018, you will no longer use Form 1040-A or Form 1040-EZ, but instead will use the redesigned Form 1040. Many people will only need to file Form 1040 and no schedules.
However, if your return is more complicated (for example you claim certain deductions or credits, or owe additional taxes) you will need to complete one or more of the new Form 1040 Schedules. Below is a general guide to what Schedule(s) you will need to file, based on your circumstances.
GUIDE TO SCHEDULES
|IF YOU…||THEN USE|
|Have additional income, such as capital gains, unemployment compensation, prize or award money, gambling winnings. Have any deductions to claim, such as student loan interest deduction, self-employment tax, educator expenses.||Schedule 1|
|Owe AMT or need to make an excess advance premium tax credit repayment.||Schedule 2|
|Can claim a nonrefundable credit other than the child tax credit or the credit for other dependents, such as the foreign tax credit, education credits, general business credit.||Schedule 3|
|Owe other taxes, such as self-employment tax, household employment taxes, additional tax on IRAs or other qualified retirement plans and tax-favored accounts.||Schedule 4|
|Can claim a refundable credit other than the earned income credit, American opportunity credit, or additional child tax credit. Have other payments, such as an amount paid with a request for an extension to file or excess social security tax withheld.||Schedule 5|
|Have a foreign address or a third party designee other than your paid preparer.||Schedule 6|
Deductions that are no longer available
1. Personal Exemptions
Personal exemptions enabled individual taxpayers to reduce taxable their income in addition to the standard deduction, but were repealed for tax years 2018 through 2025. While the standard deduction did increase significantly under tax reform to compensate – $12,000 for individuals, $24,000 for married taxpayers filing jointly, $18,000 for heads of household – some taxpayers could still lose out.
2. Tax Preparation Fees
Tax preparation fees, which fell under miscellaneous fees on Schedule A of Form 1040 (and were also subject to the 2% floor), were also eliminated for tax years 2018 through 2025 as well. Examples of tax preparation fees include payments to accountants, tax prep firms, and the cost of tax preparation software.
3. Unreimbursed Job Expenses
For tax years starting in 2018 and expiring at the end of 2025, miscellaneous unreimbursed job-related expenses that exceed 2% of adjusted gross income (AGI) are no longer deductible on Schedule A (Form 1040). Unreimbursed job-related expenses include union dues, continuing education, employer-required medical tests, regulatory and license fees (provided the employee was not reimbursed), and out-of-pocket expenses paid by an employee for uniforms, tools, and supplies.
4. Moving Expenses
Prior to tax reform (i.e., for tax years starting before January 1, 2018), taxpayers were able to deduct expenses related to moving for a job as long as the move met certain IRS criteria. However, for tax years 2018 through 2025, moving expenses are no longer deductible–unless you are a member of the Armed Forces on active duty who moves because of a military order.
Special Tax Breaks for Members of the Armed Forces
Active members of the U.S. Armed Forces should be aware that there are special tax benefits available to them such as not having to pay taxes on some types of income or more time to file and pay their federal taxes. If you’re an active member of the armed forces, here’s what you should know about these important tax benefits.
1. Moving Expenses. If you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you may be able to deduct some of your unreimbursed moving expenses.
2. Combat Pay Exclusion. If you serve in a combat zone as an enlisted person or as a warrant officer for any part of a month, military pay you received for military service during that month is not taxable. For officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received.
3. Earned Income Tax Credit (EITC). You can also elect to include your nontaxable combat pay in your “earned income” when claiming the Earned Income Tax Credit. In 2019, this credit is worth up to $6,557 for low-and-moderate-income service members. A special computation method is available for those who receive nontaxable combat pay. Choosing to include it in taxable income may boost the EITC, meaning that you owe less tax or get a larger refund.
4. Extension of Deadline to File a Tax Return. An automatic extension to file a federal income tax return is available to U.S. service members stationed abroad. Also, those serving in a combat zone typically have until 180 days after they leave the combat zone to file and to pay any tax due.
5. Joint Returns. Both spouses normally must sign a joint income tax return, but if one spouse is absent due to certain military duty or conditions, the other spouse may be able to sign for him or her. A power of attorney is required in other instances. A military installation’s legal office may be able to help with this.
6. ROTC Students. Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay, such as pay received during summer advanced camp, is taxable.
If you have any questions about this topic, don’t hesitate to call.
To have us prepare your personal tax form, click here: Personal tax return prep