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Who Will Be Preparing Your Federal Return?

At Padgett Business Services, you won’t have a faceless entity at the other end of a computer screen working on your taxes. We are a locally owned and operated company that offers tax preparation in Brentwood TN.

Our company includes two bookkeepers and a Certified Public Accountant. Our CPA and owner, Greg Lemons, has over 36 years of accounting experience and has owned his business for over 11 years, serving more than 500 clients. His vast accounting experience includes working as the CFO and controller for Fortune 500 companies. And best of all, Padgett Business Services offers you this Fortune 500 accounting experience at a price small businesses and individuals can afford!

Our Tax Filing Services

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Padgett Business Services provides both individual and small business tax preparation in Brentwood, TN. We can help you just during tax season, for estimated taxes throughout ​the year or on an ongoing basis if you need assistance with your bookkeeping and employee tax records and forms.

We also offer to:

  • File your return electronically, which enables you to receive a refund faster
  • Check and recheck your return with computer software to discover any IRS flags
  • Give you tips for the next year, including potential deductions
  • Teach you to adjust your payroll withholding, helping you keep more money each week

Depending on your needs, we can file the following forms for you or your business:

  • 1040 individual
  • 1065 partnership
  • Schedule C – self employment
  • 1120 corporation
  • 1120S – S corporation
  • LLCs

Call to Get Started

Whether you only need assistance during tax season or you need ongoing assistance for your small business, simply call when you’re ready to get started with us. And you can always call to learn more and get a free quote before deciding if you would like to take advantage of our services.

If your small business doesn’t have your books in order, don’t let that prevent you from taking advantage of our services. We can assist you in fixing up your books as well.

For assistance with your small business or individual returns, call us today at (615) 377-1161. We look forward to hearing from you!

Top 20 Tax Questions for 2019 (2018 Tax Year)

Table of contents:

When Is the Deadline for Tax Returns This Year?
How Will the Tax Reform Affect My Taxes?
When Can I File Taxes?
When Can I Expect My Refund?
Which Tax Form Should I File?
Do I Need to Pay a Penalty If I Don’t Have Health Insurance?
Are There Any Advantages to Filing Electronically?
Who Can I Claim as a Dependent?
Is There An Age Limit to Claiming My Child as a Dependent?
What Are the Benefits of Claiming a Dependent?
How Can I Get an Extension?
What Can Be Done If I Made a Mistake on a Tax Return I Already Filed?
What Filing Status Should I Choose?
What Can Be Expensed?
What Is the Minimum Income Level Required to File Taxes?
How Do I File Taxes?
How Long Should I Keep Tax Documents?
What’s the Difference Between a Tax Credit and a Tax Deduction?
What Documents Are Needed to Do My Taxes?
What Should I Do If I Can’t Pay My Taxes?

When Is the Deadline for Tax Returns This Year?

The deadline to submit your tax return for the 2018 tax year is Monday, April 15, 2019. If you’re submitting your return electronically, your taxes must be submitted that day. However, if you’re sending your return in by mail, you won’t incur penalties as long as the envelope is postmarked by April 15th. Extensions can be filed that will give you up to October 15, 2019 to file but all tax owed still needs to be paid by the April 15th date

How Will the Tax Reform Affect My Taxes?

The new tax reform will affect everyone differently based on their financial situation.

The majority of my clients are seeing lower taxes but may also see lower refunds. This is due to the withholding tables also being lowered during the year due to the new tax laws. The withholding tables are used to determine how much is withheld in your paycheck. This occurred in February 2018.

Larger standard deductions for all filing statuses will reduce your taxable income and allow people to skip the itemizing process since most itemized deductions are no longer allowed.

Since personal exemptions have been eliminated, families that have numerous dependents will be affected. For example, you can no longer claim $4,050 per dependent, but the Child Tax Credit and Dependent Care Credit are still valid and have also been increased.

The tax reform affects people who have high mortgages or home equity loans. If you’re a homeowner, you can only deduct mortgage interest if you take out a home equity line of credit to purchase or improve a home. If you take out a new mortgage or refinance, you can only deduct interest up to the limit (which is $750,000).

If you’re self-employed, own your own business, or are a contractor, the 20 percent deduction of qualified income could benefit you.

When Can I File Taxes?

The Internal Revenue Service (IRS) began processing tax returns on January 28, 2019, so you can file taxes now through April 15, 2019. If you file an extension you can also file up through October 15, 2019

When Can I Expect My Refund?

According to the IRS, the vast majority of federal tax returns (about 90 percent) are issued within 21 days, or approximately three weeks.

If you’ve mailed in a paper return, it could be up to four weeks before you see information on the IRS’ tracking tool, “Where’s My Refund?”. For people who have filed electronically, the time is just 24 hours before you can check this.

Which Tax Form Should I File?

This year everyone will use federal form 1040. The IRS has updated the 1040 form for this year and done away with the 1040EZ and 1040-A.

There are also six “schedules” that you may have to submit along with your 1040 depending on your tax situation. However, not everyone will have to file these schedules.

Do I Need to Pay a Penalty If I Don’t Have Health Insurance?

Yes. The tax reform did away with the Obamacare tax for those without health insurance in 2019 and later but not for the tax year 2018

Are There Any Advantages to Filing Electronically?

Yes. If you file electronically, you could see your refund faster, especially if you sign up for direct deposit. You’re also less likely to make mistakes when calculating figures on a computer than on paper. Many people find that filing online is easier and less frustrating than sending a tax return in the mail.

Who Can I Claim as a Dependent?

Anyone whom you support and is your qualifying child or qualifying relative is someone you can claim as a dependent.

The person must be your child, adopted child, foster child, sibling, or a descendant (think grandchild or niece) and they must have the same residence for more than six months and not have supported themselves for more than six months during the year.

You may also be able to claim a boyfriend, girlfriend, partner, or friend under certain requirements. For example, they must reside at your house for the entire year, your relationship must not violate the law, and the dependent must earn less than $4,150 a year and cannot be eligible to be claimed by anybody else.

Is There An Age Limit to Claiming My Child as a Dependent?

Yes, the person must be under the age of 19, or, under the age of 24 for a full-time student (they must have been a full-time student for a period of a minimum of 5 months). For people who are permanently disabled, these age limits do not apply.

What Are the Benefits of Claiming a Dependent?

With the tax reform, families will no longer be able to reduce their taxable income by $4,050 per dependent as in previous years (see “How Will the Tax Reform Affect My Taxes?”). You’ll now have a standard deduction in addition to the Child Tax Credit or Dependent Care Credit.

How Can I Get an Extension?

You can file an extension online with the IRS. However, it’s important to note that the extension to file doesn’t mean you’ll have more time to pay taxes you owe, just that you’ll have more time to file your tax return. Taxes are still due on April 15, 2019

What Can Be Done If I Made a Mistake on a Tax Return I Already Filed?

If you already filed your return and made a mistake, don’t just file the same form again. You’ll need to file federal form 1040X. As a result, your refund may be delayed by several weeks while the IRS processes your amendment.

What Filing Status Should I Choose?

If you’re single (not married up until the last day of 2018), you’ll choose the single filing status. You may also choose single if you’re legally divorced and do not qualify for another filing status.

If you got married in 2018, you can file married separately or married jointly, but you may not file under the single filing status.

You may choose Head of Household status, which means you’re not married, you paid more than half the cost of keeping your home for the year, and a qualifying person lived with you in the home for more than six months (see “Who Can I Claim as a Dependent?”).

If you got divorced in 2018, as long as you’re legally divorced by the last day of the tax year, you’ll be considered unmarried for the whole year, so you may choose single or Head of Household status.

If your spouse died in 2018, you can choose married filing jointly, but next year, you won’t be able to choose this status unless you remarry.

What Can Be Expensed?

If you’re a business or are self-employed, there are many expenses that can be deducted as long as they fall under the IRS’ definition of “ordinary and necessary”.

For example, advertising costs, accounting fees, business travel, equipment, legal fees, office supplies, and utilities can be written off for businesses.

For personal write-offs, you may be able to deduct the cost of childcare under certain circumstances, higher education, and medical expenses.

Thanks to the tax reform, you can now deduct medical expenses that are 7.5 percent or more of your income. This percentage was lowered from the 10 percent of previous years.

What Is the Minimum Income Level Required to File Taxes?

The minimum income level required to file taxes will vary based on your filing status and your age.

For instance, if you’re single and under 65, you must file a return if your income was at least $12,000. If you’re over 65, the income level increases to $13,600.

If you’re married and filing taxes jointly under the age of 65, the minimum amount is $24,000. If one spouse is older than 65, it’s $25,300. If you’re both 65 or older, it’s $26,600.

If you’re married filing separately, your age doesn’t matter, but your gross income must be at least $5.

For people filing under Head of Household status who are under 65, the minimum income level is $18,000. For those over 65, it’s $19,600.

And finally, for qualifying widows or widowers under 65, $24,000 will be your minimum amount. For those 65 and older, it’s $25,300.

How Do I File Taxes?

To file, you’ll need to have all necessary documents (see “What Documents Are Needed to Do My Taxes?”), including your W-2 forms from each employer, 1099 forms if applicable, and receipts for business expenses, medical expenses, and charitable donations.

Next, choose your filing status (see “What Filing Status Should I Choose?”). You may be able to take advantage of free tax return preparation, which the IRS offers to people with minimal income, people who speak minimal English, members of the military, seniors, and people who live with disabilities.

If you don’t qualify for the IRS’ free help, you may choose to use tax preparation software to guide you through filling out your return. Many people choose to do this or hire a tax preparer to do their taxes for them to simplify the process.

In order to file your taxes, you’ll need to know your income, any investment earnings, and your eligible tax credits, such as those for dependents.

The IRS accepts taxes electronically through their website or a paper return via the postal service (see “Are There Any Advantages to Filing Electronically?”).

How Long Should I Keep Tax Documents?

The IRS recommends keeping your tax documents and records for three years from the date you filed your return. If you owed money for taxes, you should keep these records for two years from the date you finished paying the tax. If you filed a claim for a loss from bad debts, keep these records for seven years.

What’s the Difference Between a Tax Credit and a Tax Deduction?

A tax deduction actually reduces the amount of income you’re taxed on. For instance, if you’re filing single for the 2018 tax year (for which you need to file by April 2019), you can deduct $12,000 as the standard deduction, so the amount of income you’re taxed on would be lowered by this amount.

A tax credit lowers the amount of taxes you owe instead of your income. So for instance, if you receive a tax credit for $2,000, your tax bill is actually lowered by $2,000.

The biggest difference is that a deduction will lower your taxable income according to your tax bracket. If you take that $2,000 as a deduction, it’ll only lower your taxable income by your tax bracket. So say your tax bracket is 25 percent—you’d only get a $500 deduction on your taxable income while a tax credit would give you a dollar-for-dollar reduction on the taxes you owe.

In almost all cases, a tax credit is better if you qualify for it.

What Documents Are Needed to Do My Taxes?

For dependents, you’ll need to have childcare records and income of adults (if applicable). If you’re a noncustodial parent, you’ll need to have form 8332 which shows that the custodial parent is signing over their rights to claim the dependent to you.

For income, you need to have your W-2 forms, unemployment forms (if applicable), 1099 forms, records of expenses (for businesses or the self-employed), rental income, and retirement income.

You’ll also need to have savings and investment information for all your accounts. You should also bring records of alimony paid or received, if applicable, along with your ex’s name and social security number.

For deductions, you may also need to have records of your mortgage interest, property tax records, proof of charitable donations, childcare expenses, higher education expenses, medical expenses, and form 1095-A, 1095-B, or 1095-C for health insurance.

What Should I Do If I Can’t Pay My Taxes?

If you owe taxes and can’t pay, it’s important to still file your return on time. You can and should pay as much as you’re able to avoid as many penalties and interest as possible from the IRS. You can also request an installment agreement with the IRS where you pay a monthly amount until the tax is paid. There is interest being charged but it is a convenient way to pay your taxes over time when you cant afford to pay them all at once.

You can file the request with your income tax filing or contact the IRS to discuss a payment plan, which you can do by calling 1-800-829-1040. By doing so, you may be able to delay collection and possibly even waive penalties or interest charges. Whatever you do, don’t neglect to file your tax return or pay taxes just because you can’t afford to.

Any Other Questions?

If you have any other tax questions and live in the Brentwood, Franklin, or Nashville area, schedule an appointment with us for your tax service needs.

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