Tax Season Guide for 2018

By Jason Arsenault

Tax season is just around the corner. You can do several things to get yourself prepared. Instead of waiting until the last minute and not remembering what you did with the documents you need to complete your tax return. The first thing is to decide what form you need to fill out.

The Internal Revenue Service uses three different forms for you to report your taxes.

The three forms are:

Form 1040EZ: You will want to use this form if you will NOT be claiming any credits or deductions. However, it does allow you to claim the Earned Income Tax Credit. This is the easiest form to use.

Form 1040A: Use this form if your taxable income is less than $100,000 and you don’t plan to itemize your deductions. You will still be able to claim tax credits, like child and dependent care expenses.

Form 1040: Anyone can use this form to file their taxes. This is a very robust form that allows you take all the deductions and credits available to you. If you claim itemized deductions, this is the form you will want to use.

Documents you will need

Probably the most important document you will need to file your tax return is your W-2 Statement. Employers must have this document made available to its employees by January 31st. This statement is reported to the IRS and tells them how much taxable income you earned during the year. However, some of you will need to watch the mail for other important statements in order to complete your tax return.

If you have investments like stocks which you have sold during the year through a broker you will receive Form 1099-B. Or, if you have long term investments which have earned dividend income, you will receive Form 1099-DIV. These forms will have information that you will need to report on your tax return. Also, if you have a savings account with your bank, they will send you Form 1099-INT. Each of these forms are required to be mailed to you by January 31st .

You are required to report all income on your tax return. However, you also want to make sure you have the statements that reduce your taxable income. If you have made any charitable contributions during the year you can deduct these on Schedule A – Itemized Deductions. The Internal Revenue Service requires that you keep a record of your deduction with a bank record or a statement from the charity. One of the biggest deductions many of you will use on your Schedule A is your Home Mortgage Interest Deduction. Your mortgage lender will issue Form 1098 which will show the interest paid during the year.

Help With Your Taxes

President Donald Trump is trying to pass Tax Reform in time for the 2018 tax season. His Tax Plan could make significant changes and add more anxiety to the already stressful requirements.

If you don’t already use a tax professional this might be a perfect time to start. Certified Public Accountants are required to stay up to date on all the new tax laws. They are also required to complete up to 40 hours of continuing education each year. You have the security of using someone who makes it their business to know taxes, not just a seasonal preparer. Gallup has a handful of CPAs who are ready to help you.

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