Your 2018 return won’t look anything like what you’re used to. The tax form is new and changes from the Tax Cuts and Jobs Act will substantially change what you can and cannot write off. Here is a roundup of the 13 most important changes to note so you’re prepared for the upcoming tax filing season.
1. New Tax Form
When you file your 2018 return, it’s going to be on a newly designed Form 1040 (not quite the size of a postcard but pretty close). There’s no longer any Form 1040A or 1040-EZ. The new 1040 used by all filers is a short two-pager and is mostly for recapping income, deductions and credits. These items are reported on new schedules1 through 6.
But don’t despair about having a new form and schedules. Most taxpayers (about 80%) use software to file electronically (known as E-filing) or paid preparers to complete their returns. If this describes you, all you need is to provide the correct information; you don’t have to worry where it goes on the form or schedules.
2. Lower Tax Rates
While there are still seven tax brackets, a number of them have been reduced. For example, the top tax rate is 37% (down from 39.6%). Overall, this means a lower tax bill for many individuals. It won’t work out favorably for all, however. Take this example: The old ceiling for the 28% tax rate was $191,650 for a single filer. That 28% bracket is now gone and a single filer at that income level is now in the 32% bracket.
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