SPOKANE, Wash. – Some taxpayers are under the impression that new tax laws passed in December will not apply to taxes filed in April. But this may not be the case for everyone.
Certified Public Accountant Anson Avery and financial planner Don Morgan spend much of their time sifting through tax laws. In fact, Avery worked to compile a binder scoring different aspects of the laws.
Though Avery and Morgan said they support the new tax laws, they want to share some important information. They identified 16 new tax laws that are “ex post facto,” meaning they will impact taxes from previous years.
Many of the new laws will not have an impact on Inland Northwest residents, like one that impacts citrus growers.
On the other hand, some laws may provide significant refunds, including one that impacts combat veterans who fought in the Sinai Peninsula. Additionally, anyone who had high medical bills last year may qualify for a large refund.
Avery and Morgan said projections suggest 90 percent of taxpayers will take a standard deduction rather than itemizing when they file their 2018 taxes.
When taxpayers claim itemized deductions, the IRS must audit them, the tax experts said. Most people will not itemize with the new large standard deduction, which makes for simpler returns and a simpler job for the IRS, they added.
Though most taxpayers will take standard deductions in the upcoming year, Avery and Morgan said they should continue to operate like they are one of the few that will not. They recommend thinking about how to modify your business if you have one or changing your personal tax recordkeeping structure in line with the changes.
They said records should include documentation of income and a running log of expenses you may claim.