Weekly Update – Tax Refunds Decrease
The IRS is reporting that the average 2018 tax refund is down 17% from last year in wake of the new tax law. Why are refunds lower, and what can we do to better prepare in 2019?
The Why: The new tax law changed the withholding tables that employers use, meaning many employees saw a small increase in their paychecks during 2018. Small enough that many of us didn’t even notice.
Additionally, the State and Local Income Tax (SALT) that can be written off was capped at $10,000. This proved to be especially painful for residents of high tax states such as New York.
Going Forward: If you are still working and saw a significantly smaller return, or even had to pay, there are several steps that you can take to help reduce the chances of any tax surprises next year. These include:
If you are in retirement, consider these steps:
A couple of hours per year spent on tax planning can prove extremely valuable. I hope you find this information helpful. If you would like to review ways to help your tax situation for 2019, please contact the office to schedule a meeting and I’ll be glad to help in anyway that I can.
Have a great weekend!
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