 Hi everyone, my name is Amy Spivey. I am the supervising attorney for the low-income taxpayer clinic at the Justice and Diversity Center We're going to talk a little bit about the changes that you might see on your 2018 tax return As you may know that some laws changed as of December 15th 2017 so we're just going to do a brief overview the presentation will be probably about 45 minutes to an hour But I will be around afterwards if you have any questions So what is a low-income taxpayer clinic? We are a national program that's funded by the National Taxpayer Advocates Office We provide free representation to low-income taxpayers before the IRS in various matters such as audits appeals tax litigation Helping people with back taxes. We receive funds from the government But we're completely independent of and not associated with the federal government Each clinic we determine if prospective clients meet the income guidelines and other criteria So the purpose of the low-income taxpayer clinics is to ensure the fairness and integrity of the tax system by Educating taxpayers about their rights and responsibilities such as this presentation today providing free representation to taxpayers in tax disputes with the IRS and the tax court and Identifying and advocating for issues that impact low-income taxpayers Change big changes are coming so like I said the new tax reform was called the tax cuts and jobs act and it Became effect into December 2017, but most of the provisions will affect your 2018 tax return There it affect many parts of your tax return including what's taxable income the tax rates deductions and credits other taxes and a lot more we're going to focus on Income personal income taxes this time But if you do have a corporation or some sort of business I highly recommend seeing a tax preparer because there was there's a whole List of other changes that happen for business taxes So the first thing is the new form 1040 is much shorter It's actually about the size of a postcard so about half the size of a sheet of paper and It's two sides You can see here. This is a draft of the form the IRS has to change Well over a thousand forms to be for the 2018 tax season So this is just a draft. It could the final version could change But there's a few changes that you'll notice first again, it's a smaller form and This font is small So this could affect affect people who are visually impaired The signature block is also on the first page of the form whereas in other years It's on the second page or on the back of the form This is important because if you use a tax preparer Make sure that you turn that form over to review all of the income information before you sign it Because even if you don't completely review all of the tax information and income and credits You would still be liable for any any items that are on that tax return once you sign it So all of the income and expenses are on the second page The first page is really only your information Any dependence in the signature block and the tax preparer information There's also less references to various schedule names and numbers that may be needed So on the old form for example the child tax credit it would say C form 8812 if you qualify for the additional tax credit well that that is not no longer on there So it's a little less intuitive. So you'll want to pay attention to the instructions on the forms and not just the form itself There's also lots of common income types that were actually moved to another form the law created six new schedules So while the main form might be Smaller you're gonna have a lot more attachments the more complicated your tax return is so for example One common one is people who have schedule C income. So if you drive for Lyft or uber Or any sort of the gig economy or you have your own small business This isn't gonna be on the form 1040 anymore. It's gonna be on a new schedule called schedule one So make sure that if you do have any other type of income besides just wages You make sure that you're reporting that even if it's not on the new form So the tax rates also change you can see I have a chart here the 2017 year and then the year 2018 to 2025 so some of these Changes that were enacted are temporary. They are only for the years 2018 and 2025 You know, they could be extended past there. We don't know. I'm just gonna talk about all of them like they're permanent because You know, that's seven years down the road. We don't know what's gonna happen between now and then so you can see the tax Brackets actually went down the tax rates except for this first category here. They've all been reduced So in 2017 the top tax bracket was thirty nine point six percent and now it's only 37 percent one thing that also changed is the range of income where the tax bracket applies to Changes are not that big of a difference except for in this category here where you're into the 200,000 to 500,000 It's a lot more people that get the lower tax rate in the higher brackets than before So the first thing that changed on the form is they did make some changes to what is actually income and Certain what they call above the line deduction. So the first thing is alimony if you this is deduction is eliminated to the person Who pays alimony, but it's also not included as income if you receive alimony Also, there previously was a tuition and fees deduction you could deduct up to four thousand dollars from your income For qualified tuition and fees that you paid You no longer have that option now There are still some education credits such as the American opportunity credit in the lifetime learning credit But these aren't a dollar for dollar deduction There's a complicated calculation on the form and also the maximum is only twenty five hundred dollars for the American Opportunity credit and then it's two thousand for the lifetime learning credit The other thing that happened was the moving expenses deduction was eliminated if you were an employee and say you got transferred From California to the New York office, but they're not going to reimburse your moving expenses You pay out of pocket for travel U-Haul expenses previously you could deduct that from your from your adjusted gross income But that has actually been eliminated now This one the tax rates. Yes Yeah, so the tax rate so for example if you made between around $9,500 to 39,000 it went from 15 percent down to 12 percent So that's the highest rate that you'll pay So for it's for example if you made a hundred thousand dollars You're going to pay ten percent on the income between this bracket Fifteen or twelve percent on the income between here twenty two percent here and then the leftover you would is twenty four percent So this is the highest rate that you're going to pay. It's not what your overall tax is going to be So the other big thing that changed was with the standard deduction and the personal deduction So previously for 2017 and before we have a standard deduction that you can take if you don't itemize your deductions You always have the option to itemize so if you own a home or you pay charitable Contributions that is above this sixty three fifty you could actually claim those as itemized deductions and There was also a personal exemption of four thousand fifty dollars per person Well, the personal exemption has been eliminated But you can see that they increased the standard deduction So this has a couple of effects one is the threshold for itemize itemizing your deduction is now higher But if you just took the standard deduction in prior years You may actually see a benefit here So if you are single and use a standard deduction and you now you get to use the twelve thousand dollars as a standard deduction You get to deduct sixteen hundred dollars more from your taxable income So your taxable income will be less than it was in prior years And for if you're married filing jointly, it's thirty two hundred dollars So this is a slight benefit if you if you only ever claim the standard deduction Everyone who previously itemized their deductions is going to see some effect from this tax law The changes again, they could make that standard deduction More beneficial for you because it's a higher threshold for itemized deductions that you have to meet So I'll go through some of these one by one because they are pretty in significant pretty significant One is the medical expenses In prior years, you could deduct the excess of ten percent of your adjusted gross income as itemized deduction well now that's been reduced to seven point five percent, so this is a benefit for you and Medical expenses are things such as doctor co-pays dental work Health insurance premiums that you pay out of pocket so if you made a hundred thousand dollars on your tax return and you spent ten thousand dollars in medical expenses in prior years you Would not have any benefit from that because the ten percent threshold is ten thousand dollars But now you'll actually be able to deduct twenty five hundred dollars as an itemized deduction Because it's reduced to seven point five percent and you can deduct anything above seventy five hundred dollars in this in this example The state and local taxes this is a big one for a lot of people in California. How many people here own homes? Okay, a few of you so this one is really going to be important for you, especially if we work in California We paste a lot of state taxes Typically you can deduct all of the state tax that you pay like that are withheld from your paycheck Plus any property taxes that you pay You can just do a dollar for dollar but starting in 2018 it's going to be capped at ten thousand dollars It's five thousand if you're married filing separately. So this is a big change if you own a home It even affects people even if you don't own a home and you you have a high wage earner And you have a lot of tax state you pay a lot of state income taxes. This is also going to affect you and This includes property taxes vehicle registration fees some sales tax that you pay they also other change is You are no longer allowed to deduct personal Casualty and theft losses unless it's a federally declared disaster which you can check on the IRS website So for example these fires are definitely going to be a federally declared disaster and you can deduct any losses you incur From the fires, but say an electrical fire started in your home and you lost your home Well, that's not a federally declared disaster in prior years You could deduct all of your losses, but now you can't deduct it There's still some losses you can deduct for business losses, but the personal losses have been eliminated Another one is job expenses in certain itemized miscellaneous deductions and this would be at the bottom of schedule a the big one here is the job expenses So if you're an employee and you have to pay some job related expenses out of pockets for me I'm an attorney. I have to pay continuing education credits That my employer may or may not if they don't reimburse them I could previously deduct it on my schedule a but now all of that has been eliminated so you can no longer deduct any Employee business expenses Yes Yeah, it's a category that was called Yeah That means that you can no longer take these job expenses and certain miscellaneous deductions. Yeah Charitable contributions now this is going to affect benefit those that are very wealthy who make a lot of charitable Contributions or those who have a business a lot of business losses that reduce their adjusted gross income Previously you can deduct up to 50% of your adjusted gross income as charitable deductions on as itemized deduction But now it's up to 60% you can deduct more, but I don't know about you I don't deduct I don't Give Cheryl can contributions of 50,000 or 50% of my income. Yes That's the adjusted gross income. So that's your income minus some certain allowable expenses before you take the standard deduction Yes This coming year 2018. So your next tax return all these changes are going to be yes Yes, yeah, I mean they can always Change the laws, but Yeah, it's based on you know what Congress enacted Yeah, yes Yeah, so you can deduct Right, you it used to be 50% of your adjusted gross income So if you made a hundred thousand dollars you could deduct up to fifty thousand dollars of charitable contributions Correct. So now you could deduct sixty thousand dollars No, you can no longer deduct like any job related expenses if you're a on a w2 employee Now if you're if you're self-employed, it's different you can still deduct a lot of these But if you are an employee and your job does not reimburse you for certain job related expenses You can no longer deduct them. So the other thing is mortgage interest again if you are a homeowner in San Francisco and this could affect you if you bought your home before December 15th 2017 if you acquired the mortgage before that date You can deduct interest up to one million dollars of the loan and for married filing separately It was fifty five hundred thousand dollars But now if you acquired the mortgage after December 15th 2017 did anybody here acquire a mortgage after that date? Okay, so a couple people did you can only deduct interest up to $750,000 I mean this is big for the Bay Area because most of the homes that are selling now are Over well over this value. So you're able to deduct less interest than before. Yes Yes a refinance to also counts. That's a that's a new acquisition of a mortgage and then home equity Interest is note. You can no longer deduct home equity mortgage interest So home equity mortgage is a mortgage you take out based on your home using your home as equity, but you use the loan for Expenses related to your home like home improvements building a second wing to your home It's not for the actual acquisition of your home But usually for improvements now you can no longer take an interest deduction on home equity Regardless of when you took out the loan Yes Well, you can't the home equity loan is usually something completely separate And it can't generally be converted to the loan for the home because it's usually what happens is you bought the home already But you have some equity you have maybe a hundred thousand dollars in equity in your home And you can draw on that to make improvements to your home and now you can still take the home equity loan But you can't deduct the interest Yes That's married filing separate an MFJ is married filing jointly so there are some also some changes to deductions and credits for dependents and Again, this the personal exemptions are limited previously if you had three dependents you can multiply the $4,050 by three and then that's a reduction of your taxable income now that has been eliminated But they have made some changes to the child tax credit Previously you could make you could do up to a thousand dollars per child now. It's two thousand dollars per child And I do have some examples where I show the difference from now to then So you'll be able to see a little bit of this in action and see the actual impact on tax returns but There's also a portion of the child tax credit that can be refundable Previously it was up to a thousand dollars So if for example if you didn't have any if you filed a tax return, but it ended up you don't owe any income tax You were low-income you could get a thousand dollar refundable credit That's just money to you in your pocket up to a thousand dollars. Well now it's been increased to fourteen hundred dollars per child The refundable credit is also adjusted for inflation So it's been a thousand dollars for years and now every year as inflation goes up Then it will also change the refundable credit The phase out also has been increased In prior years if you made seventy five thousand dollars Single or a hundred and ten thousand dollars is married filing jointly You could know you could not take the child tax credit because it's what they call a phase out You made too much money for this credit Well now it's two two hundred thousand dollars if you're single and four hundred thousand dollars if you're married filing jointly So there's an entire Bracket of people with children that are now going to see a two thousand dollar benefit reduction in their taxes They probably they won't get the refundable tax credit, but it will reduce the amount of tax They owe by two thousand dollars per child Up to four hundred thousand dollars if they're married filing jointly Another change and I think this one's unfortunate is that the qualifying child must have a social security number in Other years you could use you can use an itin But now you cannot Qualify for this credit if your child has an itin they must have a social security number at the time you file the tax return There they did create a new category of credit That's five hundred dollars up to five hundred dollars for other qualifying Dependent so if you're taking care of an elderly parent you claim them as a as a dependent You can get up to five hundred dollars as a credit Or dependents with itins you can get up to five hundred dollars per child Yes So an itin is for someone who they don't have a social security number It's called it's just a taxpayer identification number for people who don't have or are not eligible for a social security number so a lot of people from other countries who are undocumented they use an itin to file tax returns or If they they can get an itin temporarily while they're waiting for a social security number, but in those cases they can't get the The child tax credit until they have a social security number. Yeah Individual taxpayer identification number Yes Yes So the doesn't matter when the home equity loan was taken out. They've eliminated it completely Yeah So there were a few other changes student loans that were discharged due to death or disability or no longer income Previously the entire amount that was forgiven was taxable unless you were insolvent and We see this a lot in the low-income taxpayer clinic people who became Disabled and not able to the returner to the workforce So they received they got their student loans discharged But we have to go and make the argument that they were insolvent to actually get it eliminated from their taxable income Well, now we don't have to do that. It's just automatically excluded from from taxable income The other thing that was eliminated was the shared responsibility payment now This is the penalty for not having health insurance in other years. I think it was around 1800-1900 dollars that That you must pay if you don't have health insurance. Well, you're no longer penalized now for not having health insurance Yes, you had a question. Yeah No, so the Student loans are very difficult to be discharged and really the only reason that they are discharged are for death or disability So now and then in prior years, even if they were discharged for that person You still had to be insolvent. So if you owned a home outright that you may be inherited or you've paid off many years ago And now you're disabled you wouldn't be insolvent because you own a home in the Bay Area worth You know a million dollars now and you don't have any other debts besides the student loan Then you wouldn't be insolvent. You have to pay taxes on this. So now we don't have to go into that calculation It's just automatically excluded But yeah student loans. It can really only be discharged for death or disability Yes, you know, it's about what you own Yeah, yeah, it's about the assets you own versus the liabilities So insolvency is if your liabilities are more than the assets you own and your net worth then Then you're considered insolvent for this reason so Again the show shared responsibility payment I want you to be to notice though that this is not the same as a premium tax credit that you received from Calvary, California Or from some other health marketplace So this is very confusing and this is confusing to a lot of people if you receive Premium help from Covered, California or some other health marketplace. You still have to report that form It's like a 1095 a on your tax return And if you make more money than you told Covered, California at the beginning of the year You were going to make you might have to pay back some of that premium tax credit so it's very important when you apply for Covered, California that you get your income exactly right because if you don't and You go over certain thresholds you have to pay back any Advanced premium tax credit you receive from Calvary, California So if your income changes in the year make sure you contact Covered, California Let them know the change so they can adjust your premium tax credit So you don't get hit with a big bill and this is I you know, I have clients who they Took out a withdrawal from their IRA went in the middle of the year for medical issues They lost a job. Well that took them above the limit 400% of the federal poverty level so they were completely ineligible for their premium tax credit and surprise when you file your tax return You have to pay back $15,000 $20,000 to cover California because of this so if your income changes if you make if you get any sort of wind fall If you take any money out of your retirement account make sure that you Follow up with Covered, California to make sure that you're not getting too much withheld or not getting too much premium tax credit Yes This doesn't affect your Medicare Medi-Cal. It's just for Covered, California through the marketplace exchange where you're getting help With premiums that you pay Yeah, I'm not sure about that maybe talk to me afterwards when you talk about it. Okay, you had a question in the back So Covered, California is through the from the affordable care act They created these healthcare Marketplaces and if you make us, you know make certain amount of money or you don't receive Insurance from your employer you can apply through Covered, California, and you might be eligible for assistance for your premiums and The other Thing in this slide is what's called qualified business deduction section 1 99 a if you have any self-employment Income again this includes any 1099 income Uber, Lyft any of those gig economy you have this new deduction which is 20% of the self-employment income which you get to deduct From your taxable income And the reason for this is many people don't realize that you owe self-employment taxes That's just 12 and a half percent of any self-employment income that you earn and this 20% deduction is supposed to alleviate a little bit of the bill at the end of the year for Self-employed persons, but this is very very very complicated I would really recommend that you see a tax plan or a tax preparer if you do have any self-employment or past or income this also includes As corporation income anything that you report on like schedule E or schedule C Yes Both so if you have a small business you're going to file schedule one which then references schedule C so You have an additional schedule now if you do have a small business Yes Yeah, schedule one is where they remove some of those items from the tax return that most people don't have They put it on schedule one and it's just They sort of they eliminated the 1040 easy and the 1040 a and they were trying to make the new 1040 a Substitute for those and then if you have a more complicated return you just have to start adding these additional schedules So if you have a small business you have to do schedule one and schedule C Okay, so I do have some examples here. So this is a They're homeowners and they have one dependent And I have two cases here one they have they made about a hundred thousand dollars and here they made a hundred and fifty thousand dollars So you can see some of the change some of the differences one is the deductions the thirty five Thousand dollars that includes property taxes State and local income tax that they withheld from their paycheck and mortgage interest Those are the only three that I put on the schedule a But you can see here that it's limited now to thirty thousand dollars and the reason for that is For the ten thousand dollar state and local tax Limit so for the ten thousand dollar case I put five thousand dollars of state and local tax plus ten thousand dollars of property taxes But here you could deduct fifteen thousand the whole fifteen thousand but here you can only deduct the maximum of ten thousand again the exemptions in the Exemptions were twelve thousand one thousand one hundred fifty and now they've been eliminated The child tax credit for this person Increased from one thousand to two thousand So the change in tax they have an increase in the tax that they're going to pay or that they that they are Oh to seven point five percent now I didn't Include the taxes that they prepaid in this is just what the total bill would be you probably wouldn't pay out of pocket If you have w2 withholdings, but I just wanted to show the impact of the total tax that you will owe on your tax return Yes, so I put twenty thousand dollars of mortgage interests Yeah The only limit on the mortgage interest is that seven hundred and fifty thousand dollar alone So if your loan is more than seven hundred fifty thousand dollars and you bought it after December 2017 It would you could only take the interest up to that value the rest of it You can't deduct but I didn't I didn't go into that here. It's it's a complicated Calculation and then so here for the hundred fifty thousand dollars You know their deductions were a little more because they have more state tax withholding So that's the only difference here is a they withhold a little more state taxes from their paycheck but The deductions are exactly the same because they're both limited to the ten thousand dollars for the property tax and the state and local tax, but the big difference here is Like I said, they weren't eligible for child tax credit before because the limit was a hundred and ten thousand dollars But they get it's this person got it a thousand dollar extra tax credit child tax credit But they get the entire two thousand dollars. So that results in them only having an increase of one point two percent in tax So the person who likes the couple who makes less money is Going to see a larger increase in their taxes and that's because of the child tax credit And then I put down here the tax rate. So the marginal tax rate, which we talked about was the highest rate but the effective tax rate is when you just do a straight calculation of The taxable income versus the total tax You can see that the tax rate is much lower from previous years Okay, this one is a rent renters with one dependent and I use the same income limits here Here they will actually see a big reduction in their tax and this is because they took the standard deduction previously and the joint the Personal standard deduction has increased here, but again this child tax credit is a big one this couple only saw a Increase of a thousand dollars for a child tax credit and this person saw two thousand dollars for the child tax credit increase and Here's a single runner a single person no dependents. They don't own a home I used a hundred thousand and seven seventy five thousand here And you can see the change in taxes less for both of these cases Not it's not as big of a difference as the couple who didn't have a home But have dependents, but it's still a reduction in the amount of tax that you pay Yes Yeah So the marginal tax rate is the rate that your highest income tax bracket is going to get taxed So like I said for example, if you made a hundred thousand dollars 80 it's like eighty four thousand and below It's a different rate But then the difference between the hundred thousand and the eighty four thousand is taxed at twenty two percent so It's just about the highest tax bracket Not all of your income is taxed at the highest tax bracket the lower income is still taxed at the lower tax brackets but when you Take a take into account all the tax brackets all of your deductions and credits That's how you get to the effective tax rate. That's the total amount you're gonna end up paying after everything Yeah, so a summary of the impact middle-income households with a home may actually see an increase in the tax And we saw that from the example. They were the only example that I provided where their tax actually increased And this is due to that state and local tax slash property tax maximum of ten thousand dollars and in the bay area It's not hard to reach that ten thousand dollars just with your state and local income tax Much less when you own a home property taxes are over one percent here. So It's very very easy to reach that ten thousand dollar limit and those are the people That are going to see the biggest negative impact to their tax return Yes No, the California tax return has I don't think has been changed significantly The major the major changes were with the IRS and the California did I think they are playing with the idea of making some changes for The property tax and state and local tax, but I don't think any of that has been finalized yet But I think they're trying to lessen this impact a little bit because we do pay in California a lot of income tax And a lot of property tax. So it's it negatively impacts us Compared to someone in Florida who doesn't pay State taxes, they only have a home They're not going to be as impacted as much as we are in California where we have state tax and a pretty high property taxes Yes state and local yes Sales tax Right, you can't exceed ten thousand dollars and the most common deductions there are the taxes you have withheld from your paycheck property taxes Some sales tax and vehicle registration fees No, it's just the state and local taxes Is there another question? Yes Yeah, so if you paid twenty thousand dollars in Combined property taxes and state and local taxes You're only going to be able to deduct as itemized deduction ten thousand dollars of it The rest of it is just gone. You don't see any benefit from that you paid it But you get no more benefit from it So non-home owners they could see a decrease in their tax and we saw that again from the example and it's just this state and local tax It's really really impacting us in California Another thing that's important is even if your tax rate is lower You know, even if you see this reduction in tax You may owe more tax on your tax return because they may not be withholding enough from your tax your paycheck every month and I'm gonna go through that a little bit in a second but Just because the tax that you are gonna owe on your tax return does not mean that you won't owe at the end of the year because They're not with they may not be withholding enough from your paycheck every month and then every case is different Please consult with a tax preparer or planner. These are just general examples that I made up So every every case is going to be different and everyone has little nuances Well, what if you can't pay the tax that's due on your tax return We'll always file your tax return on time Even if you can't pay it if you don't you'll get hit with penalties. You'll get hit with interest The statute of limitations on collection for taxes does not start until you file your tax return or the IRS files one for you You have options if you can't afford it again If you get hit with a big tax bill because your taxes increased you didn't have enough withheld You can always apply for an installment agreement when you file your tax return You can do an offer and compromise if the amount is significant and you can't make monthly payments on it You can also do something called currently not collectible, which is just a hold on any collection action But the installment agreement is what I recommend for most people if you just don't have enough right now But you'll be able to pay it off within I think five years is the installment agreement land But you can always pay pay it off quicker than that And what why do I say always file your tax return on time will one you get the penalties But if you don't file your tax return and you have self-employment income if you don't file it within three years You don't get credit with Social Security So you actually will get less at the end Whenever you retire and you get Social Security because you will be missing those credits with the Social Security Administration So if you have self-employment tax, please file your tax return on time regardless of whether you can pay it So if you don't pay your taxes the IRS or the French as tax board can file a lien against you They usually do this for ten thousand dollars or more They can also levy your bank accounts. Just go in and take the money out of your bank account They can garnish your wages the IRS actually is ten years to collect taxes. You don't pay and the French as tax board has 20 so if they Takes some off the top of your paycheck every month They get the IRS or the French as tax board can issue an order to your employer say hey You need to withhold 10% of their income I think it's actually 25% of their income and pass it directly to us at the tax agency They don't get to see that money and I can provide these by the slides by email for you guys And if you have a tax lien, it's gonna affect your property You won't be able to sell your property if you do sell it the IRS or the French tax We're just gonna take what you owe them right off the top. You won't be able to refinance It becomes public record and can affect your employment or maybe your credit score It's also it also can prevent you from getting public housing. I have a client now who owes to the franchise tax board She's been on the wait list for public housing for eight years And she's now in the top 30 of the list. They let her know But if we don't get that lien removed by the time they come to her name She's gonna go right back to the end of the list and she's gonna wait another eight ten years So here's some suggestions use the IRS paycheck checkup now use it now So make sure that you're having enough withheld from your taxes. So let me show you the website really quick So here here it is though the IRS has put a withholding calculator here So you can just fill out these forms here. It has a Lot of information that you you can enter and I'll show you what the result is and The people who should use this if you're a two-income family If you have two or more jobs at the same time or only work part of the year If you claim credits like the child tax credit, you have dependents aged 17 or older You itemized your deductions in 2017. You have a high income or a complex tax return Or if you had either a large refund last year or you had a large bill I would recommend that you use this paycheck check up And here's a little summary. I just did a mock paycheck check up And here's it gives you some great information. It says it tells you how much they estimate your taxes to be It has a place for you to enter your dependents any itemized deductions And it says right here if you don't it's it's very clear in the instructions It says if you do not change your current withholding you will have You'll owe this much money when you file your tax return So this is a great tool so that you can start saving now or you can make pre payments to the IRS ahead of time so that you aren't Hit with a big bill and aren't able to pay it at the time you file your return It also tells you gives you suggestions on how to change your w4 The w4 is the form you fill out when you get a job and it tells you and you fill out Oh, I'm a I only have one job. I'm single. I don't have any dependents and it tells you how much they withhold from your taxes The form w4 did change this year So even if you if your employer hasn't had you fill out a new one you might want to fill out a new one Especially if this tool gives you instructions it says you need to it gives you specific instructions Enter zero on line five of your w4. So this gives you very clear instructions on how to Have enough withheld but not too much withheld Yes, I don't know if California has something similar This is just on the IRS side But again the tax brackets and everything aren't changing significant significantly with California So you might not see much of a difference with California. Yeah, I'm not sure I would check the franchise tax board website and you can you can see on there. You had a question so You said you're retired you get a pension the other sources of income are they do you get a 1099 or are you on a w2? Or they just cash that you get 1099 So you're self-employed in that can in that situation. So you file a schedule C you can Do something called estimated tax payments. It's a form 1040 dash ES yep, and So it's different if you are self-employed versus if you have a w2 because if you're w2 they withhold a certain percentage of your Paycheck every month and send it to the IRS. But if you're self-employed, it's your responsibility four times a year to pay Pre-pay to the IRS how much you're gonna owe because we're on a what they call pay as you go tax system So you would fill out the form 1040 ES instead of doing the paycheck checkup. So this is just for people who Get a w2 Yes, yeah, we're talking about how much you should Yeah, so the account when you have you do estimated tax payments. He's projecting how much you're gonna owe For your own your tax return and saying pay this amount in small increments so that you don't get hit with penalties because you underpaid Well, you can certainly use the form yourself the form 1040 Yes, there's also not on the IRS website, but some of the tax preparation sites like turbo tax They'll have a free tax estimator which you can use as well But the I don't the IRS doesn't have something specifically for self-employed persons except for the 1040 ES form Which you you can certainly go through yourself You're welcome. That's if you are paying a 401 into a 401k It has you enter like if you if you did a cafeteria plan or a 401k plan, that's what that is I just entered that number in for this example Or retirement account a 401k is a retirement account So if you pay If your employer offers a 401k retirement account They can deduct some from your check each month that they deposit in there and you can get a deduction for that on your tax return Well, however much you pay in up to I think $2,500 I'm not sure the exact amount, but there's a maximum amount that you can deduct for for contributions Use a tax preparer or tax software. Please don't do this by hand unless you have I don't know just wages a 1w2 Why well you see there's so many changes these talk tax software That preparers use or that you can use yourself have all of this information Incorporated into their software They're gonna make sure that all of the correct schedules are attached that you don't leave anything off that you're maximizing your credits You can file your returns certain returns for free with the IRS free file There's a link here. You can also look for a free tax prep location I'll talk a little more about that and then there's another website called taxchanges.us Where it has more details a little more details about the various changes and some in the tax law and some things I didn't go over the tax form Not yet Eventually you'll be able to download the tax form right now. It's just a draft of the form. So they aren't probably aren't going to release it until January the end of January when the tax season starts because they are working very hard to get the form out right now. Yes Yeah, so if you qualify for the free free filing software, there are income limits And there if you have a self if you have a schedule C You're not eligible for certain types of the free filing software But if you're I think it's under 64 or 65,000 something like that You can use is they're great It says turbo tax is free if you make under a certain amount of money If they're still doing it but tax act again, that's another one. That's free for you to use if you make more than the the income limit for the All-encompassing software the IRS has something called free file But you have to be a little more sophisticated to use that it doesn't auto populate forms You have to know which forms that you to add So I think it'll be worth paying for a software this year if you don't qualify for the free software Just because it's it's just going to be a minefield of mistakes that you could make And also it's it's like a postcard size. I mean is it gonna get lost in the mail like if you mail in a return? I mean, there's all questions. It's gonna be answered So if you if you make under $54,000 and there's a couple other requirements But the threat main threshold is $54,000. You can actually visit Volunteer income tax assistance or a vita site There's many many of these sites throughout the Bay Area in San Francisco that they will open towards the end of January and you can go on the IRS website here to To find a location that's close to you There's also something called tax counseling for the elderly. It's a TCE site and this they offer free tax counseling and Preparation for anyone who's over 60. I don't think there's income limits on this one So if you are over 60, I would take advantage of this They offer tax planning so if they're as soon as they're open you can definitely give them a call and say hey Can you go over this with me now? and on that note I would try not to wait till April 15th if possible to follow your return get it prepared you can always get it prepared early and then save up money If you are gonna oh if you if you don't think you'll have enough save for the taxes you may owe Yes, you have a question No, they do prep they do preparation Yeah, tax counseling and prep for 60 and over any other questions There here's our intake line if you are having some issues with we don't prepare taxes at the low-income taxpayer clinic But if you do owe back taxes or your return to get selected for audit, you can certainly give us a call Or send an email here, but I'll stick around for any other questions. Do I have any questions now?