Changes to know before filing

Most tax law changes don't affect the average taxpayer. That's fortunate news, considering the U.S. averaged at least one tax law change per day every day between 2000 and 2012.

Some tax changes generally happen every year, such as inflation adjustments to standard deduction and exemption amounts. Others happen every few years, like expiration or renewal of credits and deductions, new taxes and tax increases.

What can you do to ensure you maximize the benefit or minimize the negative impact of tax law changes each year? It's quite simple, says TaxAct spokesperson Jessi Dolmage.

"Do a dry run of your federal income tax return each fall," Dolmage recommends. "DIY tax programs are updated with the latest tax laws every fall so you can get an estimate of your refund or liability as it currently stands. The Q&A also reviews credits and deductions you can still take advantage of in the next few months."

You can do tax planning and calculate your 2014 taxes with a DIY tax return preparation solution (most are free to try) or with a tax calculator like TaxAct's at www.TaxAct.com/tax-calculator.

Whether you start your taxes early or wait until the April 15, 2015, deadline, here's a list of key changes that could impact your 2014 tax return:

  • Personal and dependent exemptions increase to $3,950 per person.
  • The 2014 standard deduction is $6,200 for a single taxpayer and $9,100 for a head of household. The standard deduction for married couples filing jointly also increased to $12,400.
  • Several benefits have expired, although Congress may extend them for 2014 returns. Those include the tuition and fees deduction, educator expense deduction, deduction for mortgage insurance premiums, cancellation of some mortgage debt, nonbusiness energy property credit, and state and local sales tax deduction.
  • Did you purchase health insurance from the federal or a state-sponsored marketplace in 2014? If so, your marketplace will send Form 1095-A by Jan. 31. Simply enter the form information when your tax program asks for it.

If you qualified for the premium tax credit toward marketplace insurance, the information you need to report on your return will also be on Form 1095-A. Your credit amount, which was based on your best estimate of your household income at the time you applied for insurance, will be reconciled with your actual income reported on your tax return. If your income or household size changed since applying for insurance, so can your credit amount. You may receive a larger refund if your income was less than estimated, or you may have to pay some of the credit back if your income was more than estimated.

  • If you didn't have minimum essential health insurance for three or more months in 2014 and don't qualify for an exemption, you may pay a shared responsibility payment. The penalty is the higher of 1 percent of your 2014 income or $95 per adult and $47.50 per uninsured dependent under 18, up to $285 per family. Your tax program will ask simple questions to calculate your payment.

If you qualify for an exemption, keep in mind some exemptions require you to submit an application and supporting documentation before filing your tax return. Only paper applications are being accepted by marketplaces, so processing can take weeks. Once accepted, your marketplace will issue an exemption certificate number (ECN) that you report on your tax return in order to avoid the penalty.

Learn about more tax law changes at www.irs.gov and www.TaxAct.com/taxinfo. Visit healthcare.gov and healthcareact.com for premium credit and exemption information.

April 2018
S M T W T F S
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30

Upcoming Tax Dates

April 10 — Employees who work for tips
If you received $20 or more in tips during March, report them to your employer. You can use Form 4070.

April 15 — Individuals *2017 Filing Deadline: 04-17, 2018*
File a 2017 income tax return (Form 1040, 1040A, or 1040EZ) and pay any tax due. If you want an automatic 6 month extension of time to file the return, file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. For more information, see Form 4868. Then, file Form 1040, 1040A, or 1040EZ by 10-15.

April 15 — Corporations *2017 Filing Deadline: 04-17, 2018*
File a 2017 calendar year income tax return (Form 1120) and pay any tax due. Details

April 15 — Individuals
If you are not paying your 2018 income tax through withholding (or will not pay in enough tax during the year that way), pay the first installment of your 2018 estimated tax. Use Form 1040ES.

April 15 — Household Employers
If you paid cash wages of $2,000 or more in 2017 to a household employee, you must file Schedule H Details

April 15 — Corporations
Deposit the first installment of estimated income tax for 2017 Details

April 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in March.

April 15 — Household employers
If you paid cash wages of $$2,000 or more in 2017 to a household employee, you must file Schedule H (Form 1040). If you are required to file a federal income tax return (Form 1040), file Schedule H (Form 1040) with the return and report any household employment taxes. Report any federal unemployment (FUTA) tax on Schedule H (Form 1040) if you paid total cash wages of $1,000 or more in any calendar quarter of 2016 or 2017 to household employees. Also, report any income tax you withheld for your household employees.

April 30 — Social security, Medicare, and withheld income tax
File Form 941 for the first quarter of 2018. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until 05-10 to file the return.

April 30 — Federal unemployment tax.
Deposit the tax owed through 03-if more than $500.

View More Tax Dates