Preparing for tax day

Use these tips to help you prepare for your appointment

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Call First for Appointment? Call or Schedule here.

Electronic Filing Offered? Yes.

Drop-off Service Available? Yes, strongly encouraged.

Required documents to keep on file:

  • Copies of Drivers License or State IDs
  • Social Security Cards
  • Proof of Residence for dependents claiming EIC

Income documents:

  • Income from jobs: forms W-2 for you and your spouse
  • Investment income—various forms 1099 (-INT, -DIV, -B, etc.), K-1s, stock option information
  • Income from state and local income tax refunds and/or unemployment: forms 1099-G
  • Taxable alimony received
  • Business or farming income—profit/loss statement, capital equipment information
  • If you use your home for business—home size, office size, home expenses, office expenses.
  • IRA/pension distributions—forms 1099-R, 8606
  • Rental property income/expense—profit/Loss statement, rental property suspended loss information
  • Social Security benefits—forms SSA-1099
  • Income from sales of property—original cost and cost of improvements, escrow closing statement, cancelled debt information (form 1099-C)
  • Prior year installment sale information—forms 6252, principal and Interest collected during the year, SSN and address of payer
  • Other miscellaneous income—jury duty, gambling winnings, Medical Savings Account (MSA), scholarships, etc.

(Use our handy IRS document search tool for your documents)

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Other tax documents:

  • IRA contributions
  • Energy credits
  • Student loan interest
  • Medical Savings Account (MSA) contributions
  • Moving expenses (for tax years prior to 2018 only)
  • Self-employed health insurance payments
  • Keogh, SEP, SIMPLE and other self-employed pension plans
  • Alimony paid that is tax dedcutible
  • Educator expenses
  • State and local income taxes paid
  • Real estate taxes paid
  • Personal property taxes—vehicle license fee based on value
  • Estimated tax payment made during the year, prior year refund applied to current year, and any amount paid with an extension to file.
  • Direct deposit information—routing and account numbers
  • Foreign bank account information—location, name of bank, account number, peak value of account during the year

Tax deduction documents:

  • Advance Child Tax Credit payment
  • Child care costs—provider’s name, address, tax id, and amount paid
  • Education costs—forms 1098-T, education expenses
  • Adoption costs—SSN of child, legal, medical, and transportation costs
  • Home mortgage interest and points you paid—Forms 1098
  • Investment interest expense
  • Charitable donations—cash amounts and value of donated property, miles driven, and out-of-pocket expenses
  • Casualty and theft losses—amount of damage, insurance reimbursements
  • Other miscellaneous tax deductions—union dues, unreimbursed employee expenses (uniforms, supplies, seminars, continuing education, publications, travel, etc.)  (for tax years prior to 2018 only)
  • Medical and dental expenses

How can I check on my tax refunds? Tax Related Web-sites/phone numbers: IRS www.irs.gov IRS Get Refund Status IRS Inquiry Phone: (800) 829-1040

Current Tax rates

Current rates information provided by Tax Foundation

2019 Tax Brackets

Income Tax Brackets and Rates

The Tax Cuts and Jobs Act’s tax-bracket changes went into effect for the 2018 tax year. There are no structural changes for 2019. Seven tax brackets exist, and then seven marginal tax rates — From 10% to 37%. These are also unchanged.

As you review the brackets, the income ranges for each rate have been adjusted for inflation.

Table 1. Tax Brackets and Rates, 2019

Rate
For Unmarried Individuals, Taxable Income Over
For Married Individuals Filing Joint Returns, Taxable Income Over
For Heads of Households, Taxable Income Over
10%
$0
$0
$0
12%
$9,700
$19,400
$13,850
22%
$39,475
$78,950
$52,850
24%
$84,200
$168,400
$84,200
32%
$160,725
$321,450
$160,700
35%
$204,100
$408,200
$204,100
37%
$510,300
$612,350
$510,300

Standard Deduction and Personal Exemption

The standard deduction for single filers will increase by $200 and by $400 for married couples filing jointly (Table 4).

Table 2. 2019 Standard Deduction and Personal Exemption

 

Filing Status
Deduction Amount
Single
$12,200
Married Filing Jointly
$24,400
Head of Household
$18,350

Alternative Minimum Tax

The Alternative Minimum Tax (AMT) was created in the 1960s to prevent high-income taxpayers from avoiding the individual income tax. This parallel tax income system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT. The taxpayer then needs to pay the higher of the two. The AMT uses an alternative definition of taxable income called Alternative Minimum Taxable Income (AMTI). To prevent low- and middle-income taxpayers from being subject to the AMT, taxpayers are allowed to exempt a significant amount of their income from AMTI. However, this exemption phases out for high-income taxpayers. The AMT is levied at two rates: 26 percent and 28 percent. The AMT exemption amount for 2019 is $71,700 for singles and $111,700 for married couples filing jointly (Table 3).

Table 3. 2019 Alternative Minimum Tax Exemptions

Filing Status
Exemption Amount
Unmarried Individuals
$71,700
Married Filing Jointly
$111,700

In 2019, the 28 percent AMT rate applies to excess AMTI of $194,800 for all taxpayers ($97,400 for married couples filing joint returns).

AMT exemptions phase out at 25 cents per dollar earned once taxpayer AMTI hits a certain threshold. In 2019, the exemption will start phasing out at $510,300 in AMTI for single filers and $1,020,600 for married taxpayers filing jointly (Table 4).

Table 4. 2019 Alternative Minimum Tax Exemption Phaseout Thresholds

 

Filing Status
Threshold
Unmarried Individuals
$510,300
Married Filing Jointly
$1,020,600

Earned Income Tax Credit

The maximum Earned Income Tax Credit in 2019 for single and joint filers is $529, if the filer has no children (Table 5). The maximum credit is $3,526 for one child, $5,828 for two children, and $6,557 for three or more children. All these are relatively small increases from 2018.

Table 5. 2019 Earned Income Tax Credit Parameters

Filing Status
Single or Head of Household
No Children
One Child
Two Children
Three or More Children
 
Income at Max Credit
$6,920
$10,370
$14,570
$14,570
 
Maximum Credit
$529
$3,526
$5,828
$6,557
 
Phaseout Begins
$8,650
$19,030
$19,030
$19,030
 
Phaseout Ends (Credit Equals Zero)
$15,570
$41,094
$46,703
$50,162
 
Married Filing Jointly
 
 
 
 
 
Income at Max Credit
$6,920
$10,370
$14,570
$14,570
 
Maximum Credit
$529
$3,526
$5,828
$6,557
 
Phaseout Begins
$14,450
$24,820
$24,820
$24,820
 
Phaseout Ends (Credit Equals Zero)
$21,370
$46,884
$52,493
$55,952

Qualified Business Income Deduction

The Tax Cuts and Jobs Act includes a 20 percent deduction for pass-through businesses against up to $160,700 of qualified business income for unmarried taxpayers and $321,400 for married taxpayers (Table 7).

Table 7. 2019 Qualified Business Income Deduction Thresholds

Filing Status
Threshold
Unmarried Individuals
$160,700
Married Filing Jointly
$321,400

2018 Tax Brackets

Income Tax Brackets and Rates

In 2018, the income limits for all tax brackets and all filers will be adjusted for inflation and will be as follows (Tables 1 and 2). The top marginal income tax rate of 37 percent will hit taxpayers with taxable income of $500,000 and higher for single filers and $600,000 and higher for married couples filing jointly.

Table 1. Tax Brackets and Rates, 2018

Rate
For Unmarried Individuals, Taxable Income Over
For Married Individuals Filing Joint Returns, Taxable Income Over
For Heads of Households, Taxable Income Over
10%
$0
$0
$0
12%
$9,525
$19,050
$13,600
22%
$38,700
$77,400
$51,800
24%
$82,500
$165,000
$82,500
32%
$157,500
$315,000
$157,500
35%
$200,000
$400,000
$200,000
37%
$500,000
$600,000
$500,000

Standard Deduction and Personal Exemption

The standard deduction for single filers will increase by $5,500 and by $11,000 for married couples filing jointly (Table 4). The personal exemption for 2018 is eliminated.

Table 2. 2018 Standard Deduction and Personal Exemption

Filing Status
Deduction Amount
Single
$12,000
Married Filing Jointly
$24,000
Head of Household
$18,000

 

Alternative Minimum Tax

The Alternative Minimum Tax (AMT) was created in the 1960s to prevent high-income taxpayers from avoiding the individual income tax. This parallel tax income system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT. The taxpayer then needs to pay the higher of the two. The AMT uses an alternative definition of taxable income called Alternative Minimum Taxable Income (AMTI). To prevent low- and middle-income taxpayers from being subject to the AMT, taxpayers are allowed to exempt a significant amount of their income from AMTI. However, this exemption phases out for high-income taxpayers. The AMT is levied at two rates: 26 percent and 28 percent. The AMT exemption amount for 2018 is $70,300 for singles and $109,400 for married couples filing jointly (Table 7).

Table 3. 2018 Alternative Minimum Tax Exemptions

Filing Status
Exemption Amount
Unmarried Individuals
$70,300
Married Filing Jointly
$109,400

 

In 2018, the 28 percent AMT rate applies to excess AMTI of $191,500 for all taxpayers ($95,750 for married couples filing joint returns). Under the TCJA, AMT exemptions phase out at 25 cents per dollar earned once taxpayer AMTI hits a certain threshold. In 2018, the exemption will start phasing out at $500,000 in AMTI for single filers and $1 million for married taxpayers filing jointly (Table 8.)

Table 4. 2018 Alternative Minimum Tax Exemption Phaseout Thresholds

Filing Status
Threshold
Unmarried Individuals
$500,000
Married Filing Jointly
$1,000,000

 

Earned Income Tax Credit

The maximum Earned Income Tax Credit in 2018 for single and joint filers is $520, if the filer has no children (Table 9). The credit is $3,468 for one child, $5,728 for two children, and $6,444 for three or more children. All of these are relatively small increases from 2017.

Table 5. 2018 Earned Income Tax Credit Parameters

Filing Status
No Children
One Child
Two Children
Three or More Children
Single or Head of Household
Income at Max Credit
$6,800.00
$10,200.00
$14,320.00
$14,320.00
Maximum Credit
$520.00
$3,468.00
$5,728.00
$6,444.00
Phaseout Begins
$8,510.00
$18,700.00
$18,700.00
$18,700.00
Phaseout Ends (Credit Equals Zero)
$15,310.00
$40,402.00
$45,898.00
$49,298.00
Married Filing Jointly
Income at Max Credit
$6,800.00
$10,200.00
$14,320.00
$14,320.00
Maximum Credit
$520.00
$3,468.00
$5,728.00
$6,444.00
Phaseout Begins
$14,200.00
$24,400.00
$24,400.00
$24,400.00
Phaseout Ends (Credit Equals Zero)
$21,000.00
$46,102.00
$51,598.00
$54,998.00

Tax Records Retention

Tax record retention times

WHEN IN DOUBT, DON’T THROW IT OUT

Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the “three-year law” and leads many people to believe they’re safe provided they retain their documents for this period of time. Even if the original records are provided only on paper, they can be scanned and converted to a digital format. Once the documents are in electronic form, taxpayers can download them to a backup storage device, such as an external hard drive, or burn them onto a CD or DVD (don’t forget to label it). Create a Backup Set of Records and Store Them Electronically. Keeping a backup set of records — including, for example, bank statements, tax returns, insurance policies, etc. — is easier than ever now that many financial institutions provide statements and documents electronically, and much financial information is available on the Internet. You might also consider online backup, which is the only way to ensure that data is fully protected. With online backup, files are stored in another region of the country, so that if a hurricane or other natural disaster occurs, documents remain safe.

 

Caution: Identity theft is a serious threat in today’s world, and it is important to take every precaution to avoid it. After it is no longer necessary to retain your tax records, financial statements, or any other documents with your personal information, you should dispose of these records by shredding them and not disposing of them by merely throwing them away in the trash.

However, if the IRS believes you have significantly underreported your income (by 25 percent or more), or believes there may be indication of fraud, it may go back six years in an audit. To be safe, use the following guidelines.

Business Documents To Keep For One Year

  • Correspondence with Customers and Vendors
  • Duplicate Deposit Slips
  • Purchase Orders (other than Purchasing Department copy)
  • Receiving Sheets
  • Requisitions
  • Stenographer’s Notebooks
  • Stockroom Withdrawal Forms

Business Documents To Keep For Three Years

  • Employee Personnel Records (after termination)
  • Employment Applications
  • Expired Insurance Policies
  • General Correspondence
  • Internal Audit Reports
  • Internal Reports
  • Petty Cash Vouchers
  • Physical Inventory Tags
  • Savings Bond Registration Records of Employees
  • Time Cards For Hourly Employees

Business Documents To Keep For Six Years

  • Accident Reports, Claims
  • Accounts Payable Ledgers and Schedules
  • Accounts Receivable Ledgers and Schedules
  • Bank Statements and Reconciliations
  • Cancelled Checks
  • Cancelled Stock and Bond Certificates
  • Employment Tax Records
  • Expense Analysis and Expense Distribution Schedules
  • Expired Contracts, Leases
  • Expired Option Records
  • Inventories of Products, Materials, Supplies
  • Invoices to Customers
  • Notes Receivable Ledgers, Schedules
  • Payroll Records and Summaries, including payment to pensioners
  • Plant Cost Ledgers
  • Purchasing Department Copies of Purchase Orders
  • Sales Records
  • Subsidiary Ledgers
  • Time Books
  • Travel and Entertainment Records
  • Vouchers for Payments to Vendors, Employees, etc.
  • Voucher Register, Schedules

Special Circumstances

  • Car Records (keep until the car is sold)
  • Credit Card Receipts (keep with your credit card statement)
  • Insurance Policies (keep for the life of the policy)
  • Mortgages / Deeds / Leases (keep 6 years beyond the agreement)
  • Pay Stubs (keep until reconciled with your W-2)
  • Property Records / improvement receipts (keep until property sold)
  • Sales Receipts (keep for life of the warranty)
  • Stock and Bond Records (keep for 6 years beyond selling)
  • Warranties and Instructions (keep for the life of the product)
  • Other Bills (keep until payment is verified on the next bill)
  • Depreciation Schedules and Other Capital Asset Records (keep for 3 years after the tax life of the asset)
Personal Documents To Keep For One Year

  • Bank Statements
  • Paycheck Stubs (reconcile with W-2)
  • Canceled checks
  • Monthly and quarterly mutual fund and retirement contribution statements (reconcile with year end statement)

Personal Documents To Keep For Three Years

  • Credit Card Statements
  • Medical Bills (in case of insurance disputes) 
  • Utility Records
  • Expired Insurance Policies 

Personal Documents To Keep For Six Years

  • Supporting Documents For Tax Returns
  • Accident Reports and Claims
  • Medical Bills (if tax-related)
  • Property Records / Improvement Receipts
  • Sales Receipts
  • Wage Garnishments
  • Other Tax-Related Bills

Personal Records To Keep Forever

  • CPA Audit Reports
  • Legal Records
  • Important Correspondence
  • Income Tax Returns
  • Income Tax Payment Checks
  • Investment Trade Confirmations
  • Retirement and Pension Records

Business Records To Keep Forever While federal guidelines do not require you to keep tax records “forever,” in many cases there will be other reasons you’ll want to retain these documents indefinitely.

  • Audit Reports from CPAs/Accountants
  • Cancelled Checks for Important Payments (especially tax payments)
  • Cash Books, Charts of Accounts
  • Contracts, Leases Currently in Effect
  • Corporate Documents (incorporation, charter, by-laws, etc.)
  • Documents substantiating fixed asset additions
  • Deeds
  • Depreciation Schedules
  • Financial Statements (Year End)
  • General and Private Ledgers, Year End Trial Balances
  • Insurance Records, Current Accident Reports, Claims, Policies
  • Investment Trade Confirmations
  • IRS Revenue Agents’ Reports
  • Journals
  • Legal Records, Correspondence and Other Important Matters
  • Minute Books of Directors and Stockholders
  • Mortgages, Bills of Sale
  • Property Appraisals by Outside Appraisers
  • Property Records
  • Retirement and Pension Records
  • Tax Returns and Worksheets
  • Trademark and Patent Registrations