Tips & Checklists for 2019 Business & Individual Tax Returns

Congress changed fewer tax laws for 2019 than last year’s landslide, but there’s still meaningful savings out there for businesses and individuals. Read on for some of our top tips, plus download our newly updated checklists to simplify your experience.

2019 Business Tax Returns — Tips & Checklist

Tax law changes affect businesses differently depending on their tax entity type, but here a some tips to consider from both new and previous tax law:

New types of Health Reimbursement Arrangements (HRA’s) were approved for 2020. HRA’s are a type of small business health plan (check out our small business health plans post for an overview) and they just became even more flexible by increasing the amount that can be reimbursed, expanding what costs can be covered, allowing grouping of employees, plus expanding which businesses can use them. If you haven’t considered an HRA for your business before, this can be a very attractive and helpful option.

Clarification around Qualified Business Income Deduction for rental properties. A lot of the questions around whether rental property owners could claim the new 20% business income deduction were clarified (but not all). The IRS defined ‘safe harbor’ criteria that would put rental property owners in the clear, plus the industry has evolved its interpretations of the law, making this savings now much clearer to apply.

Different types of retirement contributions may be advantageous for business owners. The new Qualified Business Income Deduction affects many parts of your tax return, and depending on your company’s profit and the amount of your retirement contribution, sending that money to a Traditional IRA rather than a SEP IRA or SIMPLE IRA can result in overall less tax.

Expanded Section 179 depreciation contains a host of benefits. A long-time favorite of business owners, changes to Section 179 deprecation can now benefit you in new ways it hasn’t before: For example, HVAC replacements historically had to be depreciated over a decade or more but can now can qualify for 100% write-off when criteria are met. And if you’re upgrading your business vehicle by trading in the old, that trade-in value can now qualify 100% write-off too. These and other changes mean it’s often worthwhile to riffle through your purchases and be sure you’re maximizing this benefit.

Re-consider disallowed entertainment costs for savings. Just because entertainment costs became non-deductible under the 2018 tax law doesn’t mean you have to throw the baby out with the bath water — remember that if food is part of that entertainment, it mostly likely *does* count for a deduction, and sometimes even 100% (versus the normal 50%).

Members of ElementsCPA can download our 2019 business tax return kick-off packet for an interactive checklist to tick through before your tax interview, an overview of the tax filing process (including important cut-off dates), and other important bits of information.

Be sure to run a year-end checkup on your books, and also see the links at the end of this post for additional helpful resources (such as easily uploading your files, checking refund status, and more).

2019 Individual Tax Returns — Tips & Checklist

Somewhere around 30% more taxpayers filed using the “standard deduction” in 2018 than the year before. But there’s opportunities for tax savings even if you’re not itemizing, such as:

Use the $11.4 million estate tax exemption to your advantage. The IRS recently clarified that taxpayers who act today under the current high estate tax exemption won’t be penalized later at their passing if the exemption drops down in the future (e.g., back to the $2 million it’s been in years past). Some critical tax saving planning can result from this unique wrinkle.

No more healthcare penalty. Starting in 2019, the penalty for not having “minimum essential coverage” (essentially at least a basic health insurance plan) is zero.

Tesla electric vehicle credit gone. If you’ve been thinking about getting a Tesla, the original $7,500 tax credit was stepped down progressively starting in September 2018 and is fully gone by the end of 2019.

Alimony is no longer deductible/includible. Starting in 2019, divorce or separation agreements that provide for alimony will no longer result in a deduction for the payor spouse or inclusion as income for the recipient spouse, marking a significant change to long-standing tax law.

“Kiddie tax” using new tax brackets. In case you missed it, the tax brackets applied to your children’s investment income are no longer your own, but the trust/estate brackets which can lead to more advantageous treatment.

Members of ElementsCPA can download our 2019 individual tax return kick-off packet for an interactive checklist to tick through before your tax interview, an overview of the tax filing process (including important cut-off dates), and other important bits of information.

Bonus: checkout the links below for even more helpful resources to use this tax filing season.

Additional Resources for 2019 Tax Returns

Here’s some additional handy links to bookmark for the 2019 tax return filing season:

Upload tax documents to your personal e-Cabinet — Save a step if your tax documents are already digitally or avoid accidentally mis-placing the physical papers for those that aren’t — securely upload them them to the your personal Upload Files Here folder in your e-Cabinet. (First time? — watch this video produced by our team.)

Electronically sign your tax return — Once your return is done, quickly and easily ‘sign the dotted line’ using our e-signature platform. (Check out our video for a helpful guide if needed.)

Check your refund status — Return already filed and just waiting for the refund direct deposit or check? Keep tabs on its status using the quick links provided in our Where’s My Refund? blog post.

Extend your return — Tax documents coming late or just need more time? Active and Support Members will automatically have this taken care of for you, but others can either self-file extensions or submit a Change Request by midnight before the deadline for our team to take care of it for you — more information and links available in our Filing Tax Extensions blog post.

Get latest tax updates on our Twitter stream — Taxes are a dynamic and unfolding reality, so be sure to catch the latest updates and tips on our Twitter stream.