Decoder Ring for New Tax Forms
Many of you have either completed your taxes, filed for an extension or will complete over the next few days. Not only are the new tax changes in effect for 2018 (SALT anyone?) but the old Form 1040 is now much shorter but augmented by six new Schedules. As I have in the past, I recommend looking at your completed return and pay special attention to particular lines to help with future tax planning. This year I will also add the “tax decoder ring” to show where this information was found on past returns. Hopefully when done using, you will be more excited than Ralphie was in “A Christmas Story” with his message. Spoiler alert! This message is S-A-V-E-M-O-R-E-T-A-X-E-S.
The table below references some of the key lines from your tax return. While fairly detailed, it is not intended to cover all tax details and shouldn’t be used as tax advice. For experienced tax filers, some of the lines may seem basic but this summary can also be used by those just entering the work force and have already met their new friend FICA. I highlighted in red those items that may interest them. Do them a favor and forward this post!
Here are the 2019 tax tables for tax planning this year. Note the capital gains and qualified dividend rate is 0% for the two lowest brackets. Also note the top capital gains rate kicks in at income levels BELOW the top income tax bracket (remnant of 2017 tax rules).
I hope this helps better understand your tax return and provides ideas for tax planning throughout 2019. Contact me to discuss further. If nothing else, you got a cool “tax decoder ring”… and “be sure to drink your Ovaltine.”
Posted by Kirk, a fee-only financial advisor who looks at your complete financial picture through the lens of a multi-disciplined, credentialed professional. www.pvwealthmgt.com