Income tax filing season is here again, and this time the major changes in federal tax rules adopted at the end of 2017 will apply.
The good news is that people who prepare their own returns can rely on inexpensive or free tax preparation software to deal with all the new regulations, and many people can get in-person tax assistance at no charge.
That's particularly important this year because the changes to federal tax regulations were broad — roughly doubling standard deductions, but eliminating personal exemptions; expanding child tax credits while tightening the mortgage interest deduction; capping state and local tax deductions, while changing tax rates and income thresholds.
Many people are confused about what to expect on the bottom line that says whether money is owed to the government or a refund is coming. While the tax changes added substantially to the national debt, by slashing corporate tax rates and changing those for individuals, some taxpayers will end up paying more rather than less.
One things that's clear is that most taxpayers with children who were under age 17 at the end of last year will benefit from a doubling of the child tax credit, to $2,000 from $1,000. And a large increase in the income limits for claiming that tax credit, well into the upper-income ranges, means that most people with children that age will benefit.
Income tax rules are complex, and that's why tax preparation software and in-person tax assistance are so important.
Here is my updated annual lists of how to find free tax preparation assistance and free software. In-person assistance is offered by nonprofit groups and volunteers, and here's how to find them:
- Visit SC Thrive online at scthrive.org or call 800-726-8774 (choose option 3). You can file state and local tax returns at no cost if your adjusted gross income is less than $65,000, or $95,000 if married and filing jointly. Most households qualify, because most households have less taxable income than those limits.
The organization also offers tax clinics throughout South Carolina. Note that SC Thrive will not begin filing tax returns until Feb. 5, because the partial government shutdown caused delays, the organization said.
- Partnering with SC Thrive, the city of Charleston is hosting clinics on Saturdays from 10 a.m. to 2 p.m., for people who meet the same income criteria. They will be held Feb. 16 at James Island Recreation Complex; Feb. 23 at Bees Landing Recreation Center; March 2 at Arthur Christopher Community Center; March 9 at Forest Park Playground; and March 30 at St. Julian Devine Community Center.
- Trident United Way works with SC Thrive and provides free tax assistance at its Prosperity Center locations in Berkeley County (Moncks Corner, 843-761-6033) and Dorchester County (Summerville, 843-282-6294). Both Prosperity Center locations have tax counselors for in-person meetings, Mondays through Thursdays, and Saturday tax clinics from 10 a.m. to 1 p.m. (Feb. 9, 16, 23, and April 6 in Moncks Corner; Feb. 9, March 2 and 30, and April 13 in Summerville).
- AARP Foundation, under an agreement with the IRS, runs the Tax-Aide program for people with low to moderate incomes, using certified volunteers. To find locations visit aarp.org, or call 888-OUR-AARP (888-687-2277).
- There’s also the Volunteer Income Tax Assistance program which, according to the IRS, “offers free tax help to people who generally make $55,000 or less, persons with disabilities and limited English speaking taxpayers who need assistance in preparing their own tax returns.” To find a location go online to irs.treasury.gov/freetaxprep.
For those who don’t need in-person assistance but would like free access to tax preparation software, there are many options. Here's how to find those:
- For individuals and families who earned less than $66,000 in 2017, visit myfreetaxes.com. It’s a partnership between United Way and H&R Block, with free filing of state and local returns, and is the only such product offered by a nonprofit, according to H&R Block.
- The S.C. Department of Revenue lists multiple providers of free state and local tax filing. To find them, see the “Free File Options” list and use the links at dor.sc.gov.
- The IRS also has an online “free file software lookup tool” that will tell you what free tax-filing software is available to you. Visit irs.gov to find it.