We always hear the saying “nothing is certain, except for death and taxes.” But, uncertainty seems to surround this year’s tax season.
“There are quite a few changes, some good and some bad. We will have to see wait and see how it shakes out in the end.”
Brian Jensen is a CPA with Houlihan and Associates is an expert in his 35th year of doing taxes.
“Starting in 1984, they were a lot easier we could actually do them without a computer. Now they are so complicated.”
Back when Jensen launched his career some told him he picked a job with little security. Some predicted the tax preparer wouldn’t be needed as the government simplified the system. But, that didn’t happen.
“They found out there are gaps that people get by without paying taxes.”
The Tax Cuts and Jobs Act passed in 2017 overhauled the federal tax code. A finance website conducted a pollshowing three out of ten people don’t understand how the move might impact them.
“What do you think the average taxpayer will find when they get their taxes done?
“Until you put a pencil to it, it’s hard to say. People come to ask if this will hurt or help me? I say we have to look at all of the numbers to determine that.”
Jensen says one of the big changes when it comes to taxes, deductions.
“Someone who has itemized in the past will be surprised to find they are a standard deduction person, so their mortgage interest isn’t deductible”
The standard deduction is now $24,000 per family. Almost double from last year.
The child tax credit also increased from $1,000 to $2,000. And, state income tax is capped out at $10,000.
“Why do you think people are so freaked out about tax time?
“I think it’s the unknown. When you go in there and file your taxes you don’t know if you owe. You hopefully will get a little bit of a refund so you don’t let the government use your money too long.”
Whether you expect to pay or receive a refund this time around, Jensen has this priceless piece of advice.
“Have your taxes prepared as early as possible so on April 15thyou won’t get a shock.”
And, keep good records in case the IRS decides to audit your tax return.
