16 Apr Do You Know Why April 16 Is The Best Day Of The Tax Year?
This tax season has been eye-opening for taxpayers and tax professionals. The Tax Cuts and Jobs Act of 2017 (TCJA) changed many aspects of the tax code. Notably, the personal exemption was phased-out and several itemized deductions were reduced or eliminated. Further, the corporate federal income tax rate was reduced to 21%, entertainment expenses became nondeductible and businesses such as S-Corps, partnerships and sole proprietors may qualify for a pass-through deduction. For sure, these changes are complex and taxpayers and tax professionals have to understand them. Below are a few processes to start today to help you meet your tax responsibility under the TCJA:
Review free tax information. Think about the word “free” in the context of thousands of professionals using their time and resources to publish tax information. Tax information is made public via websites, newsletters, blogs, white papers and social media. Always consider the source of the tax information and remember that “substantial authority” is a guiding principal if you choose to use tax information as advice.
Monitor your withholding and research tax benefits. The TCJA changed the tax brackets and rates. Your employer should have implemented new withholding tables no later than February 15, 2018. In addition, taxpayers are encouraged to regularly review their life events, withholdings (or estimated tax payments) and tax laws to determine if they need to update their Forms W-4, Employee’s Withholding Allowance Certificate.
Partner with a professional. The “team” concept is a good outlook as you shop for services. One best practice is to select a qualified professional to work with you on your tax compliance goals such as paying only the taxes you owe. As a consumer of services, do your research and keep up with your tax responsibility.
Indeed, April 16 is a day that you can start or fine-tune your accounting processes within your tax household. Often, technology allows access to voluminous amounts of information such as the Internal Revenue Code, Treasury (Tax) regulations or other official tax guidance. Do not overlook your state’s department of revenue laws such as its corporate income tax rates, etc. Be advised that performing tax responsibilities at the last minute may bring on stress, rushed decisions and errors. Therefore, start preparing for the 2019 tax season today. Best wishes!