Withholding

What You Need to Know

• Due to tax changes in the Tax Cuts and Jobs Act, many taxpayers’ withholding went down in early 2018, giving them more money in their paychecks in 2018.
• You may receive a smaller refund – or even owe an unexpected tax bill – when you file your 2018 tax return next year, especially if you did not adjust your withholding after the withholding tables changed.Other changes that affect you and your family include increasing the standard deduction, suspending personal exemptions, increasing the child tax credit, adding a new credit for other dependents and limiting or discontinuing certain deductions.

What You Need to Do

• Use the IRS Withholding Calculator to perform a Paycheck Checkup to help you decide if you need to adjust your withholding or make estimated or additional tax payments now.
• Use your results from this Calculator to submit a new Form W-4, Employee’s Withholding Allowance Certificate, to your employer.
• Make estimated or additional tax payments if the withholding from your salary, pension or other income doesn’t cover the 2018 income tax that you’ll owe for the year. Form 1040-ES, Estimated Tax for Individualsalso has a worksheet to help you figure your estimated payments.

Refunds

What You Need to Know

• Expecting a refund? Some refunds cannot be issued before mid-February.
• By law, the IRS cannot issue refunds before mid-February for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit.
• This applies to the entire refund, even the portion not associated with these credits.
• While the IRS will process your return when it is received, it cannot issue EITC/ACTC related refunds before mid-February.
• Your refund may be different – or you may even owe an unexpected tax bill – when you file your 2018 tax return next year.
• New tax law may affect the tax refund you expect next year. Review new IRS Publication 5307, Tax Reform Basics for Individuals and Families, to learn more.

What You Need to Do

• Be careful not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations.
• File a complete and accurate return using your year-end W-2, bank and 1099 income statements and include all known refundable credits when you file your original tax return.
• File when you’ve received all your year-end statements and are ready to do so. If you usually file early in the year and you’re ready to file a complete and accurate return, there is no need to wait to file.
• Be aware that some returns may require additional review for a variety of reasons and take longer. For example, the IRS, along with its partners in the state’s and the nation’s tax industry, continue to strengthen security reviews to help protect against identity theft and refund fraud.
• Perform a Paycheck Checkup to help you decide if you need to adjust your withholding or make estimated or additional tax payments now.

New Form 1040, Filing Electronically and 2017 Adjusted Gross Income (AGI)

What You Need to Know

• The Form 1040 for tax year 2018 is a shorter form and replaces the current Form 1040, Form 1040A and the Form 1040EZ.
• The new Form 1040 can be supplemented with up to six additional schedules if needed.
• If you prepare and file your own taxes electronically, you must sign and validate your electronic tax return by entering your prior-year AGI or your prior-year Self-Select PIN.
• Some taxpayers using a software product for the first time may need to provide their 2017 Adjusted Gross Income, or AGI, to e-file their 2018 tax return.
• If you’re using the same tax software you used last year, you will not need to enter your prior year information to electronically sign your 2018 tax return.

What You Need to Do

• File electronically in 2019 as you usually do. Since more than nine out of 10 taxpayers use software or a tax preparer, the IRS is working with the tax community to prepare for the Form 1040 update.
• Check out IRS Free File to learn more about online free tax preparation and e-file options.
• Taxpayers who file on paper will use the updated Form 1040 and supplement it with any needed schedules.
• If you are using a software product for the first time and you have a copy of your 2017 federal income tax return, your AGI is on line 37 of the Form 1040; line 21 on the Form 1040-A or line 4 on the Form 1040-EZ.
• If you don’t have a copy of your 2017 tax return:
  • Ask your paid preparer, if you used one last year.
  • Log in to IRS.gov/account if you are an existing user.
  • Ask the IRS to mail a Tax Return Transcript to you by requesting it here or call 800-908-9946. Allow 5 to 10 days for delivery.
• Learn more about how to verify your identity and electronically sign your tax return at Validating Your Electronically Filed Tax Return.

Individual Taxpayer Identification Number (ITIN)

What You Need to Know

• You are likely to experience processing delays if you file a tax return using an expired Individual Taxpayer Identification Number.
• There are two reasons your ITIN would expire December 31, 2018:
  • If you have not used your ITIN on a U.S. tax return at least once for tax years 2015, 2016 or 2017
  • If your ITIN has the middle digits 73, 74, 75, 76, 77, 81 or 82 (9NN-73-NNNN)
• If your ITIN has middle digits 78 or 79 (expired 12/31/2016), or 70, 71, 72 or 80 (expired 12/31/2017), you can still renew it.

What You Need to Do

• Renew your ITIN now if it has or will expire and you need to file a U.S. federal tax return in 2019.
• You don’t need to take any action to renew your ITIN if you are not required to file a federal tax return.
• Understand the new documentation requirements when applying for, or renewing, an ITIN for some of your dependents.
• Ensure you submit an accurate W-7 and valid ID documents.
• Find more information at IRS.gov/ITIN.