Tax season is upon us. Taxpayers throughout the country are likely organizing tax forms and getting the new paperwork or computer programs ready for the upcoming filing deadline.
These tips can help prepare taxpayers as they get ready to file tax filings to the Internal Revenue Service (IRS) under the new tax law:
- Timeliness matters. File tax returns as soon as possible. A failure to do so can put tax returns at risk. Filing promptly will reduce the risk of identity fraud or other fraudulent attempts to steal one’s tax refund.
- New law means a new look. This year is the first-year taxpayers will file under the rules of the Tax Cuts and Jobs Act (TCJA). Taxpayers will likely immediately notice a change — not only are the rules different, the forms look different. The forms are no longer the size of a typical sheet of paper. Many tax filing forms now resemble a post card. The new law also created six additional instruction forms. As a result, although the form is smaller as promised by President Donald Trump when he unveiled his tax reform goals, it may not be less complicated.
- Exemptions and deductions are different. The TCJA essentially doubled the standard deduction rate. This means more taxpayers may choose to use the standard deduction rate as opposed to itemizing their tax returns. However, the new tax law also did away with personal and dependent exemptions. As a result, taxpayers will likely notice changes to the tax rules within the first few steps of filing their returns.
What happens if I do not follow the new rules or make a mistake? A failure to follow the new rules could trigger an audit. An audit by the IRS can lead to the finding the taxpayer owes additional money as well as fees or penalties. It is often wise to hire an attorney to represent the taxpayer’s interests and better ensure a favorable outcome.