No major changes anticipated this tax-filing season
But local experts bracing for next year as new tax laws begin

By Dave Fidlin - Special to The Freeman

Jan. 25, 2018

OCONOMOWOC — For the average filer, few year-over-year changes should be on the horizon as tax preparation season for 2017 earned income gets underway.

But local experts are recommending planning ahead for next year, when provisions from the recently adopted tax reform bill kick in for 2018 earned income.

Certified public accountant Ruth Eddingsaas said people should reconsider taking out home equity loans since property owners will no longer be able to take advantage of writing off interest paid on loans up to $100,000.

“They need to get rid of their home equity loans,” said Eddingsaas, who works out of Cornerstone Tax and Accounting in Okauchee. “The longer they wait, the more interest they’re going to pay. That’s something people can start thinking about at the beginning of this year.”

Although tax laws for 2017 closely mirror those of 2016, Bob Groth, president of Oconomowoc-based Groth Accounting, said the IRS has changed some of its protocol, which could trickle down to the time filers receive refunds.

“The IRS is basically holding back on when it is issuing the refunds,” Groth said. “There’s been more scrutiny. They’re looking at fraud in some areas.”

Groth said deductions for such itemizations as child dependants could be subject to more review.

Beginning this year, the federal agency also is going to crack down on businesses issuing 1099s to contract workers, Groth said. Fines could be issued for companies not issuing the appropriate paperwork by the Jan. 31 deadline.
 

Looking to 2019

While they are focused on this year, tax experts such as Eddingsaas and Groth also continue to gain a greater understanding of how the tax laws of next year will come into play.

“There’s so many different scenarios,” Eddingsaas said, pointing out the laws could impact two people in different ways. “But I think, at the end of the day, people will pay less in taxes.”

Groth said he predicts fewer people will itemize their taxes, beginning next year, as changes such as home equity loans come into play. But he emphasized experts abreast of tax laws will be able to offer recommendations and help filers wade through the various changes.

Regardless of the year, Eddingsaas said she continues to recommend that people adhere to some of the tried and true practices of filing taxes.

“As your documents come in, you should have just one file or one pile, so it’s all in one place,” Eddingsaas said. “Organization is key. It’s helpful if you designate one spot for everything.”

Most tax preparation experts provide people with a checklist, and Eddingsaas said she recommends people comb through it before sending all materials to an accountant.

Filing taxes can seem overwhelming, but Eddingsaas said selecting a certified professional and adhering to a few organizational tips can ease the anxiety.

“It’s not something to be afraid of,” she said. “We’re here to help you.”

Groth offered similar sentiments. “Some of this is fairly complex,” he said. “But that’s why we’re here.”