As tax season draws near I would like to take this opportunity to provide you with some year end tax planning assistance. The Tax Cut and Jobs Act (TCJA), effective this year, will result in major changes to tax filings for individuals and businesses. We appreciate you choosing us to trust with your tax matters and have been diligent in studying the tax law changes in preparation of the upcoming filing season.
Form 1040 (Individual) – Some items that have changed with the TCJA are: new alimony determinations (2019), health care penalty (2019), child & dependent tax credits, zero exemptions, qualified tuition plan usability, kiddie tax rates, tax brackets, tax rates, alternative minimum tax calculations, net operating loss treatment, increased standard deductions, and reduced itemized deductions. Reductions to the itemized deductions include home acquisition debt limits and interest tracing, $10,000 limit for state and local taxes, casualty losses, and deductibility of miscellaneous items such as tax preparation fees, unreimbursed employee expenses, and investment advisory fees.
The IRS due date is April 15, 2019. Like last year, due to changes in the IRS filing dates, we will not be accepting appointments after March 30, 2019, however you may send in your tax information to our office with all the required documents by April 5, 2019. If your tax information is not received by this time, your return may be put on extension.
Again, this year we will be utilizing our online Link Organizer portal which allows you to answer pertinent tax questions, upload tax documents, receive information/copies, and notify us of any life changes that may affect your tax filing quickly and securely. Please provide us with your updated contact information including an updated email address to email@example.com. For those of you who will be mailing your documents, please attempt to open all mailings, discard excess (envelopes), and do not staple. For anyone who would prefer a paper organizer, we will gladly provide one at your request.
As a friendly reminder, please remember to confirm payment of all estimated tax payments with us and to return your signed 8879 promptly after receiving your return, so there are no delays in your electronic filing. As a general request, I ask that you schedule appointments early, as space fills up very quickly.
Businesses – For businesses with out of state operations, the Supreme Court decision of South Dakota v. Wayfair may create additional tax reporting requirements. The TCJA created new limits for meals and entertainment deductions, a credit for employer paid family and medical leave, an excess business loss disallowance, repeal of the domestic production deduction, and possible accelerated depreciation of business assets purchased. For pass-through business entities (Schedule C, S Corp, Partnership), the TCJA changes include a 20% qualified business income deduction subject to various intricate rules and limitations.
1099 Forms issued by business clients must be filed by January 31, 2019, requiring us to have your information for issuance in our office no later than January 10, 2019. If you are providing bank statements for preparation of your business taxes, please submit your year-to-date bank statements to the office as soon as possible.
Form 1065 (Partnership) & Form 1120S (S Corporations) – The IRS due date is March 15, 2019. Please do your best to have your books closed and information to us by February 28, 2019. Please note, no changes (except further closing adjustments we provide) should be made to your books after submitting them to us for completion of your tax returns. After your return is completed, please contact us if you need assistance in closing your books so that no changes are made to prior years.
Form 1120 (C Corporations) – The IRS due date is April 15, 2019. Please do your best to have your books closed and information to us by March 30, 2019. The TCJA changes the corporate tax rate to a flat 21% and repeals the alternative minimum tax.
To find out more about how these changes will materially affect you and how to strategize for them, please contact us for a dedicated planning session or to address any other questions or concerns you may have. Thank you for the opportunity to serve you.