What's New for 2018
The filing season normally opens January 28, 2019. If you receive your documents and wish to bring them in earlier, you may do so. Once the season opens, we can proceed with filing them. Please note, there is a possibility that your refunds may be delayed once they are open due to the backlog of returns. We will update our website with any changes so please return to this page for updated information. The IRS still plans on using the April 15, 2019 deadline date, however. We recommend you schedule your appointments or drop your tax documents off as early as possible to avoid extensions. Although extensions sometimes may be necessary, the IRS and will still impose late payment penalties for those that have a tax liability after April 15, 2019.
The standard deduction has nearly doubled to $12,000 (Single), $24,000 (Married Filing Joint), and $18,000 (Head of Household). You may still itemize your deductions if they are higher than the standard deduction although there are some limits on itemized deductions this year.
Child Tax Credit:
This credit has been doubled to $2,000 per eligible dependent child. The income limits to qualify have also been increased to $200,000 ($400,000 for MFJ). If your dependent child is under 17 on December 31, 2018, you may qualify for this credit, of which up to $1,400 may be refundable.
The new law repeals the personal exemption for yourself, spouse and dependents under 17. However, you may still qualify for a $500 “Credit for other dependents” for dependents over 17, including college students, children with ITIN’s or older dependents such as parents.
State, Local and Property Taxes:
If you itemize, the limit on deducting the aggregate total of state, local AND property taxes is limited to $10,000 annually. Any amounts over this is not deductible.
HELOC and 2nd Mortgage Interest:
Originally repealed for 2018, Congress has modified the deduction for mortgage interest on home equity lines and 2nd mortgages. If the funds were used to buy, build or substantially improve your primary or second home, you may be able to deduct it. We will need to know when and for what purpose the funds were used in order to determine the deductibility of this interest.
Unreimbursed Employee Business Expenses:
If you are a W-2 employee and deduct unreimbursed business expenses (mileage, per diems, tools, union dues, uniforms, etc.), this deduction is no longer available. If you incur a lot of these expenses, you need to discuss the use of an accountable plan with your employer to be reimbursed directly for these types of expenses.
529 Savings Plans:
Ohio has doubled the state-level tax deduction from $2,000 per beneficiary to $4,000 per beneficiary. This is a great savings option for parents, grandparents and family to save for a child’s future education needs tax free. Also, withdrawals may now be used for private and religious elementary and secondary education for tuition and materials (up to $10,000 per student per year). Please call our office for an appointment to discuss this savings investment option.
Health Insurance: You are still required to maintain qualified health insurance for you and your dependents for this filing year (2018). Please provide Form 1095 for all family members with your tax documents. The IRS will not allow a return to be e-filed without noting whether or not there was coverage. In 2019, this penalty is repealed.
Children/Student Tax Returns:
We strongly encourage that you do not allow your dependent children or college students to file their own returns this year. Allowing a child to file their own return, particularly a student, can cost the child and parent literally thousands of dollars in Health Care penalties and/or Education credits. This is extremely important if you have a child in college.
Traditional/Roth IRA Contributions
You have until April 15, 2019 to contribute to your Traditional or Roth IRA accounts and have it apply to your 2018 tax return. The IRA contribution limits for 2018 are $5,500 ($6,500 if age 50 or older). These limits apply to Traditional and Roth IRAs. Please call us for an appointment to discuss your individual limits for contributing and how they will affect your tax return.