The tax season for submitting your 2018 taxes ended April 15th, for both personal and business taxes. How did you find tax season this year? Was collecting your W-2s, 1099s, receipts, paperwork, and expense records for state and federal tax returns a hairpulling exercise?
Are you already dreading next year's taxes? Keep reading to find out how tax return policies changed this past year and how it potentially impacted you individually or your business.
This Year's Tax Season
In 2018, taxes collected from American citizens and businesses totaled $3.44 trillion. For this year, it is estimated that $3.44 trillion will be collected which is a 3.3% increase. This is in line with the US GDP growth which grew by 3% in 2018 and is expected to grow by 2.1% in 2019.
Tax Changes for Individual Taxpayers
As of this year, all individual taxpayers should be using the same 1040 form, which replaces the old 1040, the 1040A and the 1040EZ. Additionally, taxpayers may need to file supplemental schedules with their 1040 if they itemize deductions or if they qualify for certain tax credits other than the basic child tax credit.
As of 2018, the standard deduction for married couples filing jointly increased from $12,700 to $24,000. Singe tax filers saw an increase from $5,650 in 2017 to $6,350 this year.
An additional deduction was implemented for those who are seniors (65 or older), or the blind. A married couple filing jointly, where both parties are blind, can have a deduction as high as $26,600.
For married couples jointly filing, with one individual being 65 or older, the standard deduction is increased by $1,300 to a maximum of $25,300. If both individuals in the married couple are 65 or older, the standard increase goes up to $2,600.
A single individual, or head of a household, that is 65 or older can increase their standard deduction by $1,600.
Lastly, for someone who is 65 or older and blind both deductions apply and their standard deduction would be $15,200.
Seniors can ensure they are taking advantage of all of these tax breaks by using personal accounting and bookkeeping services. Ultra ITS provides seniors with their tax preparation any year.
Tax Changes for Business Owners
Some qualifying business owners, regardless of their industry, were eligible for a twenty percent deduction. Business owners qualified if their taxable income was under $157,500 on their own, or under $315,000 if they're married.
A new limitation for business owners was on business losses for individual taxpayers. If you file excess business losses, they will be carried forward to later years. Excess business losses are defined as exceeding $250,000 for an individual or $500,000 for a married joint-filing couple.
Did You Catch All Your Tax Breaks?
There were several other tax changes that positively impacted business and individuals. Did you catch them all? Tax changes happen every year and missing these changes can have serious monetary consequences. For your tax preparation next year, use a professional personal accounting and bookkeeping services. A professional service is aware of all tax breaks and changes and can ensure you get the maximum tax return possible.
Ultra ITS offers accounting services to assist seniors and small business owners with all their bookkeeping needs. Contact us today to see how we can help you with all your personal accounting and bookkeeping needs.