Upcoming Tax Season Has Accountants Busy
Some say filing taxes is right up there with getting a root canal. This tax season could be more painful for Minnesotans.
David Hoffman is a Certified Public Accountant in Brooklyn Park. He has crunched numbers for decades and says this year could be more challenging because Minnesota is not in conformity with federal guidelines.
“Minnesota tax return is still going to be filed with the rules that apply to years ending after December 31st of 2016,” he explained. “Whereas, the federal government is using rules that apply to years ending after years December 31st of 17.”
Here’s where the big changes come into play: For the first time, Minnesotans can either use the standard deduction or itemize on state taxes, regardless of how you file your federal tax return. Before, the two had to line up the same.
Big Differences in Federal and Minnesota Tax Deductions
“Big differences on the federal and state standard deductions– $24,000 for married filing jointly on the federal and $13,000 on the state of Minnesota,” said Hoffman.
Tax filers will also have to go through more Minnesota forms—the state has their own schedule for itemized deductions this year.
There’s also changes in what you can and cannot deduct.
“Un-reimbursed medical, un-reimbursed business expenses– that will be deductible on your state of Minnesota, where it’s not deductible on the federal return,” Hoffman said.
And speaking about deductions. If you bike to work and get reimbursed by your employer, you might be surprised by this change.
“On the federal return, they’re going to tax the reimbursement on using your bike commuting, state of Minnesota you can still deduct it,” said Hoffman.
Minnesota Department of Revenue Upgrading software
Meanwhile, the Minnesota Department of Revenue is updating its computer software to make things easier to navigate.
“They may have to answer a few more questions on that electronic software, but overall, it should be similar experience to what they’ve had in previous years,” said Minnesota Department Revenue Spokesperson Ryan Brown.
If someone else does your taxes–prepare to pay more.
“It’s going to cost our clients more money to have their return, because I think it’s going to take longer to do it,” said Hoffman.
The Minnesota Department of Revenue is encouraging people to keep their receipts. Some people think they can toss them out because they are taking standard deductions on federal tax forms. But, you still need those receipts to itemize on state tax documents.