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Bookkeeping Income Tax Katy Texas
Main tax changes that will impact the 2019 tax season
The standard deduction increased to a maximum of $24,000 ($26,600 for senior taxpayers). This will simplify tax returns for most taxpayers by making itemized deductions unnecessary. If last year your tax status was married filing jointly, you itemized and the total itemized deduction amount was less than $24,000, the higher standard deduction this year will give you a greater tax benefit. On the other hand, if you are single with mortgage or other sizable deductions, itemizing might give you a better tax outcome.
Personal exemptions were eliminated. In previous years, you could exempt from income approximately $4,000 per taxpayer or per each dependent. This year, these exemptions were eliminated. If your filing status is head of household or married filing jointly, do not itemize deductions and you have two or more dependents, your taxable income will go up as a result of the elimination of personal exemptions.
The penalty for not having health insurance continues to be in force this tax season. The penalty for not having health insurance is 2.5% of your total household adjusted gross income, or $695 per adult and $347.50 per child, to a maximum of $2,085. If you worked for an employer you should also receive form 1095-C with the names of all persons covered under your health plan. You will need to provide this form to me along with the other customary tax forms to prepare your return.
The child tax credit for a qualified child under the age of 17 doubles to $2,000 with up to $1,400 being refundable depending on your tax situation.
The IRS expanded due diligence requirements for the Head of Household filing status. If you file under that status, please be prepared to answer questions and/or provide documentation to support your filing status.
2018 Tax Reform calculator
Curious about how the Tax Reform will affect your 2018 income tax? Click on the Tax Reform calculator below and see for yourself.
Tax rates are coming down
Standard deductions are increasing significantly but personal exemptions are eliminated. The net effect will depend on the number of dependents. For more information, check the link below.
For tax year 2018, the penalty for not having health insurance remains at 2.5% of your total household adjusted gross income, or $695 per adult and $347.50 per child, to a maximum of $2,085.
The simplest way to avoid the penalty is by having insurance. Visit Healthcare.gov to make this possible.
As part of the recent tax reform, the individual responsibility tax will disappear beginning in 2019.
New Partnership audit rules
According to new rules that take effect in 2018, adjustments from IRS audits to a partnership will generally impose tax liability on the partnership rather than the partners.
Unless a partnership makes an election to opt out of the new rules, they will apply even to small husband-and-wife partnerships. The election must be made on a yearly basis.