Everything You Need to Know to File Your 2018 Tax Return
Today marks the start of the tax season, and between the ongoing government shutdown and the introduction of the 2017 tax law, it promises to be interesting (well … as exciting as tax season can be).
If you are unsure whether to choose a larger standard deduction or detail deductions, or if you just want to know what is happening with your Form 1040, we can help you.
Tax year 2018 schedule
Here are the important dates to keep in mind for this year’s tax season:
January 28, 2019
The IRS begins processing tax returns for 2018.
April 15, 2019
The deadline for filing a tax return for most people is (April 15th – Monday this year), as well as a deadline for applying for an extension if you need to. Remember, if you think you have tax arrears, you still need to pay by that date to avoid late payment penalties.
This is also the deadline for the first round of estimated quarterly taxes from Jan 1 to March 31 if you are a freelancer, and the last day you can contribute to your Health Savings, IRA, Roth IRA, SEP-IRA, or solo 401 (k) account for 2018 year.
April 17, 2019
Maine or Massachusetts tax filing deadline “due to Patriots Day April 15 in Maine and Massachusetts and April 16 Liberation Day in DC.”
June 17, 2019
The second round of quarterly taxes is payable for freelance income earned between April 1st and May 31st.
Also the deadline for US citizens residing overseas to file a return or apply for an extension.
September 16, 2019
The third round of quarterly taxes is payable if you are a freelancer for income earned between June 1 and August 31 (last quarterly tax payment due January 2020).
October 15, 2019
The deadline for filing the 2018 return if you applied for an extension, and the last day for filing the 2018 return electronically.
Check out this post for more precise dates.
Tax categories and rates vary
As you probably know, the limits, thresholds and income tax rates were changed in 2018. The 37 percent cap will apply to those with taxable income of $ 500,000 or more for individual filing individuals and $ 600,000 or more for co-filing married couples, down from 39.6% who filed applications for single applicants with income over $ 418,400 and married couples with income over $ 470,700.
You can find 2019 tax brackets here .
What Happens to Your 1040 Form
There has been a big push to simplify federal taxes, but the TCJA hasn’t really done it. However, it changed your standard return form and added a bunch of new charts. Here’s a breakdown .
To detail or not to list?
One of the biggest questions is whether to use a standard deduction, a fixed reduction in adjusted gross income, or disaggregate, which means you select the applicable tax deduction to lower your AGI. Obviously, you probably want to choose the one that lowers your AGI the most so that you pay less taxes. Read more about it here .
How big will your refund be?
Since most families received tax cuts in 2018, you can expect more refunds this year. But as the Wall Street Journal explains, your experience will be different. Richard Rubin of the magazine writes:
Tax cuts and tax refunds are not the same thing. A tax cut is a change in how much people owe in 2018 compared to what they would owe if Congress had done nothing. A refund is what happens when the IRS sends back any additional money paid during 2018 or grants any refundable tax credit.
Many families will receive a larger refund than they usually do, while others will not because they already received it through several big paychecks during 2018. “This is because the IRS changed the default rules for calculating how much taxes are withheld from paychecks. writes Rubin. “These changes took effect in February, although some taxpayers have manually adjusted the withholding amount to reflect the 2019 reimbursement.” You may have tax arrears if you did not change the withholding amount last year.
Which tax software should you use?
If you make less than $ 66,000 a year, you can file state and federal tax returns for free through the IRS Free File program, a partnership between the agency and various tax companies. To use the free IRS file entirely for a fee, you need to go through the agency’s web portal – if you go to the tax inspector’s website, you will most likely receive additional sales .
If you do, there are potentially still ways to apply for free. The IRS notes that “there are free fillable file forms, an electronic version of the IRS paper forms, that will be available when the IRS begins filing season on January 28th.” But there are also additional software options, including Credit Karma Tax , which is completely free for state and federal filings, and FreeTaxUSA , which offers free federal and state filings worth $ 12.95. Here we have more information on registration in each state .
And if you have a difficult tax situation, have gone through major life changes in the last year, or, well, you are rich, consider hiring a tax filler .
How long does it take to receive a refund
As Lifehacker wrote last year , the IRS “strives to make all refunds within 21 days of your application submission if you did so electronically, but it will take longer if you mail your notice,” usually four to eight weeks. However, the implementation of the new law meant that the IRS had to update their systems, and those updates were behind schedule . Combined with the turmoil surrounding the government shutdown, this could be a very tough tax season . So give it some time. Track your refund using the IRS2Go app or its online refund tool .
These are the basics – stay tuned throughout the tax season as we answer more of your specific tax questions.