Sometimes financial problems can be solved relatively easily. I was struggling to make it from week to week until I learned that some financial organization could change my spending habits. If you can organize your personal finances, you will see exactly where all of your hard earned money goes. You will be shocked to see how much the morning coffee and donuts cost you each month. This blog will provide you with information that can help you get your personal finances organized so that you don't have to continue struggling from paycheck to paycheck throughout each and every month this year.
With the passing of tax reform efforts, many taxpayers wonder if this means that they will now be able to prepare their own taxes. Certainly, some advocates of reform efforts touted the current changes as making things easier and more efficient. But has it turned out so? And can you now try to do it without professional assistance? Here are a few answers.
1. Tax Reform Moved Things Around
While much has been made of the simplification of Form 1040, many taxpayers won't notice a particularly simpler form. In fact, much of the work that needs to be done to come up with the number to place on Form 1040 has simply been shifted to multiple new schedules.
While this makes the overall form smaller, you must now prepare and attach these additional forms instead. This can be confusing if you file manually and aren't aware of the additional need for forms and schedules.
2. New Credits Were Added
One of the biggest changes that most taxpayers will notice is for those who have a pass-through entity. Sole proprietors and subcontractors who receive Form 1099 can now take a new business income deduction that may equal up to 20% of their business earnings. However, you must understand the rules for this new credit — among other new additions that have been added to the tax code.
3. Rules Were Changed
Do you know the thresholds, phase-out limits, and rules for each of the tax credits you normally take? Many of these rules have changed but not been eliminated or rewritten. This simply means that your taxes must meet the adjusted rules in order to continue (or start) deducting each credit. For example, while you can still itemize deductions, limits and alterations were made as to what can be deducted.
4. Tax Planning Has Changed
When the rules for completing your Forms 1040 and other documents change, each taxpayer should take the time to do new tax planning. Some taxpayers received a lower-than-expected tax refund. Others received more.
What will the 2020 tax filing season hold? The best way to find out is to meet with an experienced tax preparation service as soon as possible. Talk with your preparer about the ability to create scenarios based on possible tax moves you can make before the end of 2019.
Most Americans hope to see their tax preparation made so easy that they can do it all on their own. But the reality is that reform continues to muddy the waters — making things easier for some and more complex for others. To find out where you stand now that new laws have been passed, find tax preparation services today.
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