This tax season will be the first which incorporates the significant tax rule changes implemented under the Tax Cuts and Jobs Act passed in late 2017 (“TCJA”). One of the goals of the TCJA was to simplify tax filings, however despite the rhetoric, the TCJA added significant complexity that may change a process you thought you had a grasp on. To make matters even more confusing, with the recently-ending government shutdown, many taxpayers are curious how this may impact their tax filing and refunds.
When – As it has been in the past, the tax deadline for 2019 is Monday, April 15, 2019. But this does not mean you have to wait till April 15th to file. The IRS recently announced that it will begin processing tax returns on January 28th. However, if you file an extension by April 15th, the due date for your return is October 15th.
Refund Timeframe – Based on last year’s timetable, taxpayers should expect to receive their refund within 21 days. However, due to the government shutdown, delays are expected and therefore it is a good idea start as early as possible.
Property Taxes Changes– New York property owners have indefinitely heard that there are new tax rules relating to property tax deductions. For tax years 2018 through 2025, the deduction for state and local tax deductions (which includes property taxes) is limited to $10,000 (or $5,000 for married filing separately). This may be one of the largest differences you see as a result of the TCJA.
Standard Deductions on the Rise – Married couples filing jointly are entitled to a standard deduction of $24,000 on their 2018 federal income tax returns — that’s
Itemize or no? – Whether you itemized deductions or not last year may not dictate your decision this year. Due to the recent tax changes, notably the limitation on state and local tax deductions, the elimination of exemptions for spouses and children, and the
Refund Expectations – In early 2018, the IRS updated tax withholding tables to reflect the lower tax rates under the TCJA. The implementation of these updated tables likely resulted in a larger weekly paycheck for most taxpayers as opposed to a bigger refund check. The IRS has encouraged taxpayers to perform what they have referred to as a “paycheck checkup” to determine whether they have the right amount of tax withheld from their paychecks. For those who did not withhold correctly, there is a chance that they may owe money, or may receive less than they expected. Use this as an opportunity to review your withholding to ensure you do not under withhold in the upcoming year.
This article should serve as an introduction to the new tax rules and procedures, however, we encourage you to speak with your tax preparer or tax attorney to assist during this transition period. With change comes questions, both for taxpayers and practitioners, and therefore we encourage you to act as early as possible and contact us is you have any questions.
Russo Law Group, P.C.
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Garden City, NY 11530