Major tax reform could change the way you file this year

Major tax reform could change the way you file this year

COLUMBIA, SC (WIS) - Despite the ongoing government shutdown, the IRS has said they will still begin processing tax returns on time, and that there should not be any major delays with issuing refunds. Still, there are a few things to keep in mind when filing this year.

After major tax reform in 2018, filing your taxes may be just a little different this year. For the last several months, the IRS has been advising taxpayers to double check their W-4s. That Employee Withholding Allowance Certificate, which you turn in to your employer, may need to be adjusted with the new tax bill in effect. T

his will likely affect two-income families and people who claim the Child Tax Credit. Employees who have been withholding too little are not paying enough taxes throughout the year, and may face an unexpected tax bill or penalty when they file.

People who have been withholding too much will get less money in their regular paycheck, unless you adjust your W-4 for more allowances. Then, you’ll get more money in your paychecks throughout the year.

With these changes, it may be tricky to decide whether or not to hire a professional. Tony Perricelli, CPA, is a tax and advisory services member with Scott & Company in Columbia.

“You’re earning a wage, you get a W-2 form from your employer, you have some of the very basic deductions like a mortgage and you give a little bit to charity – typically, I think self-prepared returns can be fine," he said. "You can use one of the online services, and I think those work very well. Where we see a big advantage to using someone like us – a CPA, a professional to do tax returns – is mostly with folks who own businesses and there’s a lot of things that can go into owning a business, a lot of nuances of the tax code and a lot of ways that you can reduce your taxes by owning a business, and we’re experts on being able to find those deductions.”

If you’re unsure whether your W-4 needs to be adjusted, the IRS is providing a withholding calculator to make sure you’re not withholding too much or too little. You can find that calculator by clicking here.

State and federal returns are due April 15, 2019.

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