CPA’s are warning taxpayers to check the amount of withholding their employer is taking and project it out for the year. With the new withholding tables employers are withholding less because of the Standard Deduction increases under the new law, but at the end of the year in many cases it is doubtful the taxpayer will get a refund for overpaying their taxes. The reason is the withholding tables allow the taxpayer to keep more of their paycheck now but in reality the taxpayer is getting their refund as they go throughout the year.

With the government shutdown, refunds are at a standstill. Also the new tax laws for individuals result in significant changes. There are no exemptions any more for individuals in the family, the new law increased the amount of the “Standard Deduction”. Beware the increase in the standard deduction is not enough in some cases to cover the loss of the exemption deductions. In my case I am paying significantly higher taxes for 2018 than I did in 2017.

There are several versions of Turbo Tax available. I get Turbo Tax Home and Business because it includes the forms for investment buys and sells and Schedule C for a business. If your family only has W-2’s you can get Turbo Tax Deluxe which is less expensive. If you have never used Turbo Tax before , it is good to guide the taxpayer through the preparation process and do a good check on your return to make sure there is only a small chance you will be audited. Turbo Tax also offers audit assistance for a fee if you want to have a professional represent you in the event of an audit.

If you find that you will be owing additional taxes in addition to what you have already paid for 2018. Determine if you have paid in 90% of the total Federal Income Tax due so you will not incur a penalty and interest. If you have not paid in 90% within the prescribed time periods for 2018 , then it would be best for you to complete and file your return as soon as possible to avoid any further interest. If you have paid in 90% or more of the Federal Income Tax due and owe additional taxes , I would wait until April 1st to pay them. Most people would rather have their money available until near the tax deadline if they owe taxes. Of course if you have a refund coming for your family then file as soon as you receive W-2, 1099 Forms, and any other necessary documents have been received to complete the 2018 Federal Tax return.

Most State Income Tax returns are based on the Federal Tax Return Adjusted Gross Income. If a family owes Federal Income tax in addition to that deducted from pay or paid by making tax estimates, it is likely they will need to look at the State Income tax return to see if they owe additional taxes there. The process on Turbo Tax takes the person through the return line by line. After everything is entered it checks the return to see if it looks reasonable. It tells the taxpayer the potential audit risk.

At that point the taxpayer can begin the State Tax return. The information the person entered in the personal information will be used to begin the State Return and the necessary Federal Adjusted Gross Income is carried over to the State Return. At that point some State Returns adjust the Federal Adjusted Gross Income for differences in the tax law for that particular state.

When both the Federal and the State tax returns are completed , the taxpayer has the option of filing electronically on line. The process is explained and actually performed using Turbo Tax for both the Federal and State Return. After both the Federal and State Tax Return are checked for errors and thought to be ok for submission, the filing process is explained.

If the taxpayer files electronically, they will get an email usually within 72 hours saying the IRS has accepted your return for processing. It usually takes about five days for most States to send an email saying they have accepted the taxpayer’s return for filing.

The IRS actually has tracking on the status of your return after it is filed. Go to the IRS website and it will tell you how to track your return.

How is your monthly budget going for January. If you did not set up a monthly budget for January, now is the time to begin preparing a monthly budget for February. A family budget will keep you on your toes and make you feel better about your financial status.

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