My take on the new changes for 2018 tax returns

Standard Deductions have almost doubled! Meaning, a lot of you will no longer itemize. Single is up to $12,000 (almost what married filing jointly was), Head of Household is $18, 000, and Married Filing Jointly is $24,000. However there is no longer the extra exemption deduction.

A lot has changed with Itemized Deductions. Medical Expenses are retroactive at 7.5% of income vs 10% in prior years. All deductions must be on an after-tax  being paid.  

State local and property tax are limited to $10,000.

Mortgage Interest is still in effect but has some limits to mortgages up to 1mil...that will change after 2020 to $750,000.  

Charitable Contributions are still in but if you make a donation to the University of TN in hopes for purchasing sporting event tickets, I am afraid this is no longer allowed.

No more deductions for business entertainment and all business meals including travel meals are only 50% deductible. Also, computer and peripheral equipment will no longer be depreciable.

Personal losses or casualty losses can no longer be deducted except for those declared a disaster area by the president.

Homeschooling your children is not deductible and is considered "private school".

Employee Expenses are no longer deductible. This really breaks my heart for a lot of my clients. Salesman, teachers, truck drivers, and work from home clients can no longer deduct for mileage and expenses out of pocket that hasn't been reimbursed. We will need to change your withholding if you have been taking this deduction.

 

Residential Rental and Self-Employed individuals are about the same, but you may be able to take an extra 20% deduction from net income. The tax rate for C-Corps has dropped to 21% tax from 35%.

Alimony: Taking a deduction for payments or claiming income is in effect for 2017, but will repeal in 2019.

Mandatory Insurance or Penalty: This has been repealed but not until 2018. Yep, they lied to us as this was a very important topic. Not to worry, I know how to file exemptions against this and have ever since it has become a law. My clients will never pay a penalty for not having insurance.  Make sure if you receive your insurance on the Market Place to have your 1095-A or 1095's.  Some of you will have more than one.

Moving deductions have completely been repelled, except for active duty military who move by order.

On a good note: Child Tax Credits are up to $2,000 per child. Earned Income Credit has a new breakdown. If you are receiving a refund for either credit, they will both be delayed until the end of February.  

Be sure to change your address for everyone who will send you tax documents. Tax documents WILL NOT forward.



Documents

Client Info Sheet and Checklist

W-4 Form (update withholding for employer)

W-9 Form (subcontractor form for 1099)

4506-T Form (to request transcripts)

940 Form (annual federal unemployment)

941 Form (quarterly payroll tax report)

9465 Form (request payment arrangements to IRS)

SS-4 Form (receive EIN number for business)

2848 Form (power of attorney)

IRS Links

IRS.gov

Where's my refund? (must have copy of tax return to complete)

Get transcripts online (must have mortgage loan, auto loan, major credit card, and cellphone in your name)

Get transcripts by mail (if you cannot complete online, add Reida Gillespie PO Box 6161 Knoxville, Tn 37914 to line 5)

Get EIN online (get business tax id online)

Make payment to IRS (payment directly to IRS)

EFTPS website (make payroll tax payments online)

Tennessee Links

Secretary of State (Form an LLC, S-Corp, or C-Corp)

File annual report (Secretary of State report)

New Business TN.gov (Register/pay local business tax)

Sales and use tax (Register/pay/apply exempt sales tax)

Franchise and excise tax (Register/pay, LLC, and Corps)

TNPAWS.gov (Register/pay state unemployment)

 

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