If tax time gets you stressed out, you aren’t the only one.
It’s the first tax season under the re-vamped tax code and you might have heard your refund may not have all the zero’s you expected it to. One of the most obvious things to know is that some of the forms like the 1040 look different this year. Something less obvious is, for instance, if you’re a small business owner, experts say filing your taxes just got more complicated.
The biggest tax overhaul in 30 years doesn’t have to mean three decades worth of confusion when you file your taxes. Key points from the experts on what to expect include that the personal exemption is gone and the standard deduction is up.
“Between those two most people will see a little benefit in reducing their taxable income and therefore reducing their tax,” said Russ Hutcherson, an AARP Tax-Aid.
There’s also been a change to child tax credit.
“Overall people with a couple of kids will probably do very well. You have more kids, it remains to be seen,” Hutcherson said.
UAH Accounting Professor Tobias Mendelson says filing your taxes as a small business owner is now more complex. You might be able to get a qualified business income deduction.
“They put individual taxpayers who own businesses and they put corporate taxpayers on par,” Mendelson said. “And they didn’t completely do it, but tried to bring, they brought in what’s known as a qualified business income deduction.”
The key word is you “might” qualify.
“There’s income limitation for individuals, there’s income limitations for married individuals, there’s limitations on the types of businesses,” Mendelson listed.
IRS data shows tax refunds are down more than 8.5 percent from last year. So the experts say you shouldn’t be relying on a big refund.
“Keep your expectations open, let’s put it that way,” Hutcherson said. “Because for a lot of reasons it’s been a turbulent year. Just be flexible, don’t blame the preparer.”
Tax experts say to be organized, try to file early, and do it electronically. If you have a professional do your taxes, don’t forget to bring your ID, social security card, last year’s return, and all the tax documents you receive to the appointment.
AARP and Redstone Federal Credit Union teamed up to offer free tax prep, which you can learn more about here. Hutcherson says they could use more volunteers.
The IRS also launched a free way to file your taxes, which you can learn about here.