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TAX TIME
As of this week, the IRS is now accepting your 2018 taxes!
While most Americans got a refund last year, averaging about $3,000, the same may not be true this year.
But it’s not all bad news.
here's why
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What’s New This Year?
- The 2017 tax code overhaul was biggest change since 1986.
- Many benefited from tax reform (ex: lower rates), but deductions changed, causing confusion.
- If you didn’t update your paycheck withholdings, you may have higher take-home pay, but now owe Uncle Sam.
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a We worry very much that there will be a perception that a My refund went down, Ia m in a worse economic position.’ When, in fact, the reality could be the opposite.a
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On The Flip Side:
a For your average taxpayer ita s going to be a record high tax refund season. Much higher than they expected.a
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Tax Prep Tips
- Its hard to do…but try to do your taxes earlier than later, to eliminate any surprises.
- Check with your tax preparer about whether or not your withholdings need updating.
- Folks who took a lot of itemized deductions or have a two-income household are “more likely than others” to see changes in their refunds” (WSJ).
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Why It Matters:
- 154 million expected to file taxes (60% of U.S. adult population).
- Consumer spending is a major impact on the overall economy.
- Verdict is out on whether tax refund *itself* is an economic stimulus.
- Remember: you only get a refund if you OVERPAY your taxes. Ultimately the goal would be to get zero refund!
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Despite the recent shutdown that impacted 7 out 8 IRS employees, refunds are expected to be "on time" (approx. 3 weeks from filing). If there's another shutdown, we'll be in uncharted territory again.
Read
Sources
- Tax preparers warn your refund may be smaller than usual this year. Herea s why:
https://www.latimes.com/business/la-fi-new-tax-rules-confusion-20190125-story.html - Rev up your calculators: What you need to file your 2018 taxes:
https://www.cnbc.com/2019/01/25/what-you-need-to-file-your-2018-taxes.html - Expecting a big tax refund?
https://www.wsj.com/articles/expecting-a-big-tax-refund-dont-be-so-sure-11548594000 - Re-calculate your W-4 using this IRS tool:
https://www.irs.gov/individuals/irs-withholding-calculator - From 2016:A Do Tax Refunds Boost the Economy?:
- http://time.com/4293090/tax-refunds-tax-day-economic-stimulus/