Tax season tips: How tax conformity could impact you
It is unlikely your ears perk up with excitement when you hear the phrase “tax conformity.” Yet, tax conformity has the potential to create countless headaches for Minnesota residents. Now that tax season is upon us again, I’m getting asked more frequently what it means and how it could impact you.
First, some quick background. Remember when President Trump signed his landmark “Tax Cuts and Jobs Act” back in 2017? That law made a number of helpful improvements to our tax code, but one byproduct was that some provisions in our state tax code needed to be updated. The process of updating our tax code to match these changes is called “tax conformity.”
Republicans in the legislature used the opportunity to simplify and streamline our tax code, so you can keep more of your hard-earned money. The plan we sent to the governor would have cut taxes for 82% of Minnesotans and held everyone else harmless. It would have preserved your state personal and dependent exemption, as well as your standard deduction and popular deductions for mortgage interest, state and local taxes, home equity loan payments, and charitable contributions. Not to mention, it would have made filing clean and easy.
Unfortunately, Gov. Dayton vetoed it.
Finishing a tax conformity and reform bill remains a top priority, but it is unlikely to be completed before your taxes are due this year. The good news is that the Department of Revenue has accounted for last year’s tax conformity veto, so the process of filing your taxes will be the same as it has been in previous years. However, it is still not a bad idea to get an early start on your taxes just in case there are any complications. Here are a few tips to help you as you prepare to file your returns.
- Tax filing season opens January 28. The filing deadline is April 15. Tax preparers and professionals are accepting returns now, but they will not be filed until the filing period opens.
- You might be eligible for free e-filing. About 90% of Minnesotans filed their taxes electronically last year. Doing so is simple and easy, and you can be confident you have all the forms you’ll need. A lot of people don’t know that they might be eligible for free filing. In fact, last year 800,000 Minnesotans could have filed for free but did not take advantage of it. To find out if you’re eligible, visit the Department of Revenue’s e-filing website.
- You may also qualify for free tax preparation assistance. To qualify you must be age 60 or older, have a disability, speak limited English or no English, or have an income of less than $55,000 per year. To find one of Minnesota’s 200-plus free tax prep locations, visit the Department of Revenue’s free tax prep website.
- Be vigilant against fraud and identity theft. Attempted fraud is becoming more and more common; it is important to be aware of potential warning signs. The IRS will never call you to demand payment, demand you pay taxes without an opportunity to question or appeal, require you to pay using a specific method, ask for a credit card over the phone, or threaten to have you arrested for not paying. For more information on common scams and how to protect yourself, visit the IRS’s fraud website: https://www.irs.gov/identity-theft-fraud-scams
Tax season can be confusing and stressful. If you have any questions, please don’t hesitate to contact me at Sen.John.Jasinski@senate.mn or 651-296-0284.
This column originally ran in the Owatonna People’s Press.