16 Jan 2019 Tax Update Conference
For the past couple of days I’ve been in Portland, OR attending a tax update conference taught by Western CPE and a very knowledgeable instructor. Just over a year ago Congress passed the biggest update to the tax code in over 30 years. Since then I’ve been learning about all the provisions and had the opportunity to dig in deeper at this conference. Here are some highlights of what we talked about –
- Form 1040 went from 2 pages to 8 –The IRS basically took each section of the old Form 1040 and spread it out over 2 pages and 6 schedule. Some of the pages only take up 1/4 of the page. I think this has something to do with the Republicans promise to making filing your taxes as simple as filling out a postcard.
- The new 20% deduction for business income is complicated – There are many exceptions, phase-ins, phase-outs, and other nuances to this new deduction. For many people it will be straightforward but for others it will really be tricky to get it right. If you are self-employed or own a business you stand to really benefit from this new provision. But if your only income is wages then you won’t benefit at all.
- The Tax Policy Center estimates that 90% of all returns will use the standard deduction – This will simplify filing for a lot of people but many people who are on the edge will still need to calculate their total itemized deductions to see if they will be more than the standard deduction. This may also make the tax strategy of bunching a good idea for many taxpayers. The idea is to bunch two years of deductible payments into a single year. One example is charitable contributions. If you normally make donations consider putting two years worth into a single tax year.
I always enjoy attending these conferences so I can keep my skills sharp and provide the best expertise for my clients. Portland is a beautiful city but a lot colder than Hawaii this time of year!
I’m looking forward to this upcoming tax season and helping my wonderful clients.