4 Tips to Prep for Tax Season 2018
If you want to make sure you’re maximizing the advantages of the new tax laws for your 2018 taxes – due April 15, 2019 – start getting your ducks in a row today. Here are four things everyone should think consider:
- Check Your W-4
That W-4 form you filled out when you started your job may need to be given a once-over in light of the new tax bill. Given the quick turnaround between the bill being passed and then enacted, all of the details and forms aren’t quite worked out.
It’s likely your company’s HR representative might not know exactly what you will need to do in order to ensure you won’t be met with a hefty tax bill come April 15, 2019, but it’s worth checking in. Recently, the IRS released it’s 2018 Tax Witholding Tables, which can help you determine if you need to adjust how much federal tax is being taken out of your check. Download the guide here: http://bit.ly/taxtablectw
- Recheck Your Retirement
Could the new laws affect your retirement numbers? Perhaps, so it’s a good idea to talk to your retirement planner to see what, if anything, you should change. For some, the lower tax rates could be a reason to convert a standard pre-tax IRA into a Roth IRA, which could save money on taxes.
It could also be a good time to tap into some of your retirement accounts to take advantage of the lower rates, too. Personal situations vary greatly, so work with a trusted professional to update your plan.
- Prepare for Vanishing Deductions
Alimony payments, moving expenses and tax preparation fees are a few of the high-profiles deductions that will now longer be allowed. For moving expenses, there will be exceptions for those in the military, but the costs associated with relocation no longer will reduce your tax burden.
Another big change? Losses sustained due to a fire, storm or theft are no longer deductible. The only way a disaster deduction can be claimed is if you have been affected by a natural disaster, such as wildfires or a hurricane.
- Take Your Medical Deductions Now
For the next two years, the deduction for medical expenses will be expanded to include more people. You now can deduct expenses up to 7.5 percent of your adjusted gross income. After two years, however, it will return to the previous threshold of 10 percent of adjusted gross income.
Also, for those caring for an elderly parent – or an adult child with a disability – you can claim a $500 temporary credit for such dependents.
— By Matthew M. F. Miller, CTW Features
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