Now that we’re past the end of 2018, it’s that time of year where you get to pull together all of your tax documents. Your official tax forms may not have started arriving yet, but you can start putting together all of your receipts! I bet you love going through stacks of papers to put medical receipts and charitable deductions in a shoebox for your tax preparer, or maybe you stuff them in an envelope instead. Not so fast!
For a married couple filing jointly the standard deduction is $24,000 for 2018, up from $12,700, and for single taxpayers the standard deduction is $12,000, up from $6,350. Due to this significant increase, the number of taxpayers who itemize is expected to drop by over 50%. Other significant changes like the $10,000 cap on tax-related deductions and the removal of miscellaneous deductions will also reduce the amount of itemizers.
So what does this mean for you and your tax preparer?
First and foremost, if you know you won’t itemize you don’t need to provide any of those documents to your tax preparer. This primarily includes:
- Medical receipts
- Property tax payments
- Mortgage interest
- Charitable Contributions
Obviously these changes won’t impact everyone so if you still itemize and want to help create less paperwork, start by creating summaries for your tax preparer. Although you need to have copies of receipts if you ever get audited, your tax preparer does not need to know every amount you spent on your prescriptions or every donation you made. In most cases, you can put together summaries and provide receipts only where you aren’t clear on whether the charge was deductible.