Facts First Before Filing Your Taxes
Financial Expert Barry Bigelow with Great Waters Financial Offers Tips as Folks File 2019 Tax Returns
DULUTH, Minn. – Nearly 90 percent of taxpayers are expected to take the standard deduction this year.
While that may sound like taxes just got easier, financial experts warn filers should be aware of some major changes to the tax code.
Financial Professional Barry Bigelow from Great Waters Financial offers tips to making your filing stress free this year.
What changes should we look for this year?
Standard Deduction Increased
• The biggest change filers will notice is the new standard deduction, which reduces your taxable income without requiring you to itemize your deductions.
• The standard deduction has doubled from $12,700 for married couples filing jointly to $24,000. That means many households will lose their incentive to itemize and will take the standard deduction. (Source if you choose to use stat: IRS.com)
• If you think you are close to the standard deduction or have reached it, try running your taxes both ways to see which one is the most beneficial to your unique situation.
• If you need some help, be sure to work with a trusted tax professional or talk with your financial advisor.
New Filing Form
• The new Form 1040 will be replacing the 1040EZ and the 1040A. (Source if you choose to use fact: IRS.gov)
• The Form 1040 is supposed the be shorter and should be the only form filers will need.
• Filers still need to have their forms in to the IRS by April, 15th 2019.
Child Tax Credit Change
• The Child Tax Credit has doubled this year to $2,000 per qualifying child.
• If your child does not qualify for the Child Tax Credit because they are over the age of 17, you may still be eligible for a $500 credit if the dependent is between the ages of 17 and 24.
• This credit also applies to dependents who are elderly or disabled.
Is there anything we can deduct if we’re taking the standard deduction?
• If you plan to take the standard deduction this year, there are some above-the-line deductions you can take.
• Contributions to your traditional IRA and HSA, as well as educational costs, could be deducted.
• Before taking these deductions, be sure to read the rules carefully as there are limits.
• To see if these deductions are for you, I have a link to the IRS Credit & Deduction page on my website, greatwatersfinancial.com
What’s staying the same this year?
• Filers will notice some familiar deductions and credits this year.
• Teachers can still deduct up to $250 of unreimbursed expense for classroom supplies.
• If you are paying off student loan debt, you can still deduct the interest you paid, up to $2,500.
• The Electric Car Credit and Adoption Assistance are also still available for filers.