If you haven’t yet met with your tax advisor, now is a good time to schedule a meeting. The Tax Cuts and Jobs Act went into effect on January 1, 2018 and represents the most significant tax overhaul in 30 years. As we enter tax season, preparing for the impacts of this new tax law might present a challenge. However, while you should be proactively planning for your taxes throughout the year, it is not too late to take advantage of some strategic tax moves before the filing deadline. Here are some things to focus on before meeting with your tax advisor.
Tips for Meeting with Your Tax Advisor
• Gather all of your needed forms. Preparation and organization is key. Start by collecting and organizing all of your needed tax forms. This includes Forms 1099 and W-2. Make sure the forms are filled out correctly. If there are any discrepancies, request a revised version from the sender.
• Decide whether itemizing still works for you. The new tax law increased the standard deduction to $12,000 for single filers and $24,000 for married couples filing jointly. It also placed new limits on itemized deductions. Taking the standard deduction might make filing your taxes easier, but it’s important to work closely with your tax professional to decide which option is right for your specific circumstances.
• Review your receipts and other deductions. If you opt for the standard deduction, this step does not pertain to you. However, if you take the itemized deduction, review your saved receipts and determine what can be itemized under the new tax law. Some examples include certain childcare expenses, certain self-employment expenses, charitable donations, mortgage interest, and medical and dental expenses that exceed 7.5 percent of your adjusted gross income.
The Tax Cuts and Jobs Act placed limits on itemized deductions and eliminated many personal deductions. For example, the unreimbursed job expenses deduction no longer exists, and the state and local tax deduction cannot exceed $10,000.
• Contribute to retirement funds. Not only does this offer the possibility of increasing your retirement savings, it may also reduce your taxable income. If your employer offers a 401(k) plan, the deadline for contributing more or maxing it out was December 31, 2018. However, you still have a bit more time to max out your IRA — April 17, 2019.
Contact Blue Oak CPA today to schedule a meeting about this tax season or to schedule a consultation to come up with a proactive strategy for 2019.