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Minor changes this tax season

Jordan Beck | Daily Press Brandy Olson, CPA of Anderson, Tackman & Company, PLC reviews a guide to the 2019 tax season recently. According to Olson, changes made to tax laws for the ongoing tax season have been minor.

ESCANABA — As the 2019 tax season has arrived, residents have begun filing their tax returns. Brandy Olson, CPA of Anderson, Tackman & Company, PLC said changes made to tax laws for 2019 have mostly been minor.

“Taxpayers should expect to see some consistency in their tax liability when compared to 2018,” she said.

The same has apparently held true for refunds in the ongoing tax season.

“It’s still early in the filing season, but so far, the refunds we have seen are similar to last year’s,” Olson said.

However, there are some changes local taxpayers should keep in mind.

“Beginning in 2019, individuals won’t have to pay a federal penalty for not being covered by insurance or by an exemption, and the individual shared responsibility payment has been permanently reduced to zero going forward,” Olson said.

Olson also noted standard deductions have seen a bump in the 2019 tax season.

“Standard deductions increased for inflation from $12,000 in 2018 to $12,200 in 2019 for a single person; married filing jointly will see a $400 increase to $24,400 and the standard deduction for head of household status was increased to $18,350,” she said.

According to Olson, IRA contribution limits have been increased to $6,000 while the additional catch-up contribution has stayed at $1,000.

“For divorce and separation agreements made or modified in 2019 or thereafter, alimony payments will not be deductible. That also means that alimony received in 2019 from those agreements cannot be included in income,” she said.

These are not the only changes introduced for the current tax season. Some of these changes can even affect previous tax returns.

“There were some late changes to education credits and the kiddie tax rules that are effective for 2019-2020 and were also made retroactive to tax year 2018. Eligible taxpayers will be able to amend their 2018 returns to take advantage of these tax savings,” Olson said.

Olson encouraged people to find an experienced, reputable tax preparer if they are not already working with one.

“Get organized and wait for all your forms to come in before setting up your appointment or dropping off your information to the selected professional,” she said.

She said people who have small businesses or children in college should consider getting advice from a CPA.

“The tax preparation fee will be minor compared to the hundreds or thousands of dollars in tax savings you may be missing out on,” Olson said.

People planning to file their own taxes should take advantage of online resources, Olson said.

“If you are preparing your own return, start with the IRS website to see if you qualify for free file and make sure you are using a reputable website before entering any personal information online,” she said.

The official IRS website is located at www.IRS.gov.

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