(Wall Street Journal) It’s Year Two following the massive tax overhaul of 2017. For Americans who are still getting used to the new rules, it’s important to sort things out before the year ends.
“People are confused about their withholding and refunds, and whether they need to save receipts to prove itemized deductions — plus other things,” says Terry Durkin, an enrolled agent in Burlington, Mass., who prepares over 300 tax returns a year.
Most filers must pay 90% of their income and self-employment taxes by year-end or soon after, or else face penalties. The IRS forgave these penalties for many people for 2018, but it won’t for 2019.
There are few ways to cut a 2019 tax bill after Dec. 31, so now is the time to make moves that will lower your tax bill in April.
At the top of Ms. Durkin’s, and many tax advisers’, to-do list for clients: Check your withholding or estimated taxes.
For 2019, the standard deduction is $12,200 for single filers and $24,400 for married couples filing jointly.
The most common itemized deductions are for state and local taxes (SALT), charitable donations and mortgage interest. Now that Congress has limited the SALT deduction to $10,000 per return both for single and married joint filers, it’s often easier for singles than couples to benefit from itemizing.