January 28, 2019, marked the start of this year’s tax filing season, and it’s the first time taxpayers will be filing under the new tax reform laws, most of which became effective in 2018. Complicating matters is a newly revised Form 1040, U.S. Individual Income Tax Return, as well as the partial shutdown of the federal government. With more than 150 million individual tax returns expected to be filed for the 2018 tax year, here’s what individual taxpayers can expect:

Government Shutdown; Filing as Usual, Tax Refunds on Schedule

Despite the government shutdown (referred to by the IRS as the lapse in appropriations) in December and January, all taxpayers should continue to meet their tax obligations as per the normal time frame. That is, individuals and businesses should continue to file tax returns and make payments and deposits with the IRS, as required by law. For taxpayers receiving tax refunds there are no anticipated delays due to the lapse in appropriations.

New Design for Form 1040

The new Form 1040 has been redesigned for 2018. It is now “postcard sized” and gathers information about the taxpayer(s) and dependents. It’s also the form you need to sign and date when filing your return. The new Form 1040 can also be filed by itself; however, more complex tax situations will generally require using one or more of the supplemental Schedules 1 through 6 (also new for 2018), which are briefly described below.

Note: Forms 1040A and 1040EZ no longer exist for tax year 2018. Instead, use the new Form 1040.

Schedules 1 through 6

As mentioned, these supplemental schedules are to be used as needed and are generally for those with more complex tax returns.

Schedule 1, Additional Income and Adjustments To Income – Report income or adjustments to income that can’t be entered directly on Form 1040.

Schedule 2, Tax – To be used if you have additional taxes that can’t be entered directly on Form 1040. These include alternative minimum tax and excess advance premium tax credit repayment.

Schedule 3, Nonrefundable Credits – Used to report nonrefundable credits other than the child tax credit or the credit for other dependents.

Schedule 4, Other Taxes – If you have other taxes that can’t be entered on Form 1040 such as additional tax on IRAs or other qualified retirement plans or household employment taxes.

Schedule 5, Other Payments and Refundable Credits – If you have other payments or refundable credits such as any estimated tax payments for 2018 or the amount paid when requesting an extension to file.

Schedule 6, Foreign Address and Third Party Designee – If you have a foreign address or want to allow another person (other than your paid tax preparer) to discuss this return with the IRS.

Filing Deadline

For most taxpayers the filing deadline to submit 2018 tax returns is Monday, April 15, 2019; however, due to the Patriots’ Day holiday on April 15 in Maine and Massachusetts, and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17, 2019 to file their returns.

Help is just a phone call away.

Don’t hesitate to contact the office if you have any questions about the new tax forms or need assistance preparing and filing your tax return this year.

• By Leon Clinton
• February 5, 2019

February 11

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

Employers – Social Security, Medicare, and withheld income tax. File Form 941 for the fourth quarter of 2018. This due date applies only if you deposited the tax for the quarter in full and on time.

Farm Employers – File Form 943 to report Social Security and Medicare taxes and withheld income tax for 2018. This due date applies only if you deposited the tax for the year in full and on time.

Certain Small Employers – File Form 944 to report Social Security and Medicare taxes and withheld income tax for 2018. This tax due date applies only if you deposited the tax for the year in full and on time.

Employers – Nonpayroll taxes. File Form 945 to report income tax withheld for 2018 on all nonpayroll items. This due date applies only if you deposited the tax for the year in full and on time.

Employers – Federal unemployment tax. File Form 940 for 2018. This due date applies only if you deposited the tax for the year in full and on time.

February 15

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in January.

Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in January.

All businesses. Give annual information statements to recipients of certain payments made during 2018. You can use the appropriate version of Form 1099 or other information return. This due date applies only to payments reported on Form 1099-B, Form 1099-S, and substitute payments reported in Box 8 or gross proceeds paid to an attorney reported in Box 14, respectively.

Individuals – If you claimed exemption from income tax witholding last year on the Form W-4 you gave your employer, you must file a new Form W-4 by this date to continue your exemption for another year.

February 16

Employers – Begin withholding income tax from the pay of any employee who claimed exemption from withholding in 2018, but did not give you a new Form W-4 to continue the exemption this year.

February 28

Businesses – File information returns (for example, certain Forms 1099) for certain payments you made during 2018. However, Form 1099-MISC reporting nonemployee compensation must be filed by January 31. There are different forms for different types of payments. Use a separate Form 1096 to summarize and transmit the forms for each type of payment. See the General Instructions for Certain Information Returns for information on what payments are covered, how much the payment must be before a return is required, what form to use, and extensions of time to file.

If you file Forms 1097, 1098, 1099 (except a Form 1099-MISC reporting nonemployee compensation), 3921, 3922 or W-2G electronically, your due date for filing them with the IRS will be extended to April 1. The due date for giving the recipient these forms generally remains January 31.

Payers of Gambling Winnings – File Form 1096, Annual Summary and Transmittal of U.S. Information Returns, along with Copy A of all the Forms W-2G you issued for 2018. If you file Forms W-2G electronically, your due date for filing them with the IRS will be extended to April 1. The due date for giving the recipient these forms remains January 31.

Large Food and Beverage Establishment Employers – with employees who work for tips. File Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips. Use Form 8027-T, Transmittal of Employer’s Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to April 2.

Health Coverage Reporting – If you are an Applicable Large Employer, file paper Forms 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and 1095-C with the IRS. For all other providers of minimum essential coverage, file paper Forms 1094-B, Transmittal of Health Coverage Information Returns, and 1095-B with the IRS. If you are filing any of these forms with the IRS electronically, your due date for filing them will be extended to April 1.

March 1

Farmers and Fishermen – File your 2018 income tax return (Form 1040) and pay any tax due. However, you have until April 15 (April 17 if you live in Maine or Massachusetts) to file if you paid your 2018 estimated tax by January 15, 2019.

• By Leon Clinton
• February 2, 2019

Starting January 1, 2019, the standard mileage rates for the use of a car, van, pickup or panel truck are as follows:

• 58 cents per mile driven for business use, up 3.5 cents from the rate for 2018
• 20 cents per mile driven for medical or moving purposes, up 2 cents from the rate for 2018.
• 14 cents per mile driven in service of charitable organizations.

The business mileage rate increased 3.5 cents for business travel miles driven and 2 cents for medical and certain moving expense from the rates for 2018. The charitable rate is set by statute and remains unchanged.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas, and oil. The rate for medical and moving purposes is based on the variable costs, such as gas and oil. The charitable rate is set by law.

Taxpayers always have the option of claiming deductions based on the actual costs of using a vehicle rather than the standard mileage rates.

Prior to tax reform, these optional standard mileage rates were used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. However, it is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for mileage related to moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. Please call if you need additional information about these and other special rules.

If you have any questions about standard mileage rates or which driving activities you should keep track of as the new tax year begins, do not hesitate to contact the office.

Need to Create Estimates? QuickBooks Can Help.

You don’t need to be a car repair shop or an HVAC technician to present prospects and customers with estima tes. In fact, there may be many times when an unexpected estimate–or bid, or proposal–will land you a job you didn’t necessarily expect.

Of course, the bottom line is the meat of your estimate, the price you’re willing to accept for your work performed. It’s your job to determine that. But let QuickBooks do what it does best: provide intuitive, efficient tools for creating and modifying estimates.

First Steps

Before you start creating estimates, you’ll need to make sure they’re turned on in QuickBooks. Open the Edit menu and select Preferences, then Jobs & Estimates | Company Preferences. If the Yes button below DO YOU CREATE ESTIMATES? is not filled in, click inside of it to turn on this feature. Also, the Warn about duplicate estimate numbers check box should be activated.

There are actually three ways to open an estimate form. You can click the Estimates icon on the home page or open the Customers menu and select Create Estimates. You can also open the Customer Center (Customers | Customer Center) and click on the Transactions tab. Click the New Transactions button in the toolbar and choose Estimates.

As you can see, you can create multiple types of sales forms from here. You can also see lists of existing and historical transactions.

Making It Yours

Before you create your first estimate, you should make sure that the form’s header, footer, and columns contain the fields you want. Use one of the three methods we just outlined to open a blank form. Then, with the Formatting tab at the top of the window active, click Customize Data Layout in the toolbar that opens to launch the Additional Customization window.

Take your time working with the options in this window. QuickBooks gives you an incredible amount of control over how your estimates will look, but don’t get ahead of yourself. Start with the most important content: the text you want to have appear. By default, the software opens a template called Custom Estimate that contains commonly-used fields, like Cost, Description, and Markup. You can easily change these by checking and unchecking their corresponding boxes.

You’ll notice that you can have specific fields appear on the screen and/or on printed copies of your estimates. You can also change the field names (use Bid or Proposal instead of Estimate, for example), and for columns only, the order in which they appear.

Warning: Be careful with the Markup field of your estimates. You wouldn’t want your customers to see this, so be sure that it is NOT checked in the Print column.

As you make changes to this template, you’ll see the graphical Previewover to the right change to reflect your modifications. Click Print Preview to see a larger, finished version of your template. When you’re satisfied with it, click OK. This will replace your Custom Estimatetemplate.

Adding Templates

You probably noticed other links and icons related to the formatting of estimates. These open advanced tools (if you need help understanding these, don’t hesitate to call). Once you’ve mastered them, you can save multiple versions of your estimate templates to use in different situations. These features include:

• Customize Design. This opens a multi-step wizard that helps you select a background, font, and grid style.
• Download Templates. You can choose from multiple pre-designed templates.
• Basic Customization. This window supplies tools for adding a logo and changing colors and fonts.
• Layout Designer. This tool is only recommended if you already have freeform design skills.

Just Like Invoices

Creating an estimate in QuickBooks is just like filling out an invoice. You enter data where appropriate, and select options from drop-down lists. If you don’t have any experience with sales forms and need some guidance, please call and set up a time to go over the entire process, as well as answer any other questions you might have about QuickBooks.

• By Leon Clinton
• January 27, 2019