Money Matters

The New Tax Return

25 Apr 2019 by: Kim Benson 

As the 2018 tax season is now behind most of us, the outcomes ranged from being pleasantly surprised with a lighter tax bill, to paying more than expected.  Back in October, we published a blog which highlighted some of the changes to the tax laws due to the 2017 Tax Cuts and Jobs Act, which can be found here. As 2019 is now well underway, we suggest reviewing your tax withholdings and estimated tax payments to ensure that you are withholding enough, but not too much, for this year by either by contacting your tax preparer or using the IRS tools available here: https://apps.irs.gov/app/withholdingcalculator/.

With the 2017 Tax Cuts and Jobs Act came a new one-page 1040 format for 2018 which was more condensed and included a series of numbered schedules. Although ironically, the actual tax return included more pages for many tax filers.  The intention by the US Treasury and the IRS was to improve and simplify the filing experience.  As such, taxpayers with straightforward tax situations would only need to file the one page 1040 and none of the numbered schedules.  Below is a list of the new schedules which may or may not apply depending on your tax situation:

Schedule 1 – Additional Taxes and Adjustments to Income: to report other income items such as capital gains or unemployment compensation or to claim deductions such as self-employment tax and student loan interest deduction.

Schedule 2 – Additional Tax: to report items you owe for Alternative Minimum Tax (AMT)

Schedule 3 – Non-refundable Credits: to claim nonrefundable credits other than the child tax credit such as the foreign tax credit, education credits, and general business credit.

Schedule 4 – Other Taxes: to report other taxes such as self-employment tax and additional tax on IRA’s or other qualified retirement plans.

Schedule 5 – Other Payments and Refundable Credits: to claim refundable credits other than the earned income credit or American opportunity credit or to have other payments withheld.

Schedule 6 – Foreign Address and Third-Party Designee: for those who have a foreign address.

Many of you may not have noticed these changes as you either work with a CPA to prepare your taxes or you use tax software that populates the forms and files your returns electronically.  While the process itself has not likely changed too much for individuals, the tax rules have changed as we referenced in our blog above.  We always encourage you to do tax planning to ensure that you understand how the changes affect you, that you are making the most of your tax situation and that you are able to minimize taxes where possible.

CCMI provides personalized fee-only financial planning and investment management services to business owners, professionals, individuals and families in San Diego and throughout the country. CCMI has a team of CERTIFIED FINANCIAL PLANNERTM professionals who act as fiduciaries, which means our clients’ interests always come first.
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With a strong technical background in corporate financial planning and analysis, a CPA and CERTIFIED FINANCIAL PLANNER™ professional, Kim also specializes in the personal side of financial planning as a Certified Financial Transitionist®. As principal and owner, Kim’s unique skill set helps her relate to clients’ evolving needs and provide clarity around significant life decisions. Kim also specializes in working with current, former and retired employees of Raytheon Technologies (RTX).

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