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.


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.

aWe worry very much that there will be a perception that aMy refund went down, Iam in a worse economic position.’ When, in fact, the reality could be the opposite.a

Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc. Although refunds *may* be lower for some, the tax cuts might've provided benefits throughout the year. If you feel discouraged by your tax refund, remember you may have benefited in other ways.

On The Flip Side:

aFor your average taxpayer itas going to be a record high tax refund season. Much higher than they expected.a

Ellen Zentner, chief United States economist Morgan Stanley. Bottom Line: There's some uncertainty over refunds for 2018 filings. Some Americans will receive a higher refund vs. 2017 taxes due to new tax code; some less.

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).



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!

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.

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