February 14, 2019 09:46 AM
ROCHESTER, N.Y. (WHEC) -- Tax season is in full swing but many aren't happy with their returns as refunds shrink while others wind up owing the Internal Revenue Service, or IRS.
They're the effects of President Donald Trump's tax reform plan taking full effect.
According to the IRS, the average refund is dropping about eight percent with three million more Americans owing this year instead of getting a refund.
"My husband and I are trying to figure out if filing separate or together is going to be better for us," said Rochester resident Kayla Bermudez.
One reason is that less money is being withheld from paychecks.
Personal exemptions have also been eliminated.
"What was typically referred to as miscellaneous itemized deductions are no longer allowable," explained Jim Schnell, a tax professional at Mengel Metzger Barr & Co. "A big ticket item for families in that realm was investment fees and brokerage fees."
Other deductions that are no longer allowed include:
Instead, families may qualify for the child tax credit, raised to $2,000 per child.
"It's double what it was before so married families with children will have an easier way offsetting the loss of personal exemptions on their returns," Schnell explained.
The SALT deduction, which are state and local taxes, is also now capped at $10,000 while standard deductions have doubled to $12,000 for individuals and $24,000 for joint filers.
Schnell says to reduce your taxable income, contribute to your individual retirement account or IRA and health savings account.
"If you do file and aren't happy with the results, adjust your withholdings from your paycheck at work," recommended Schnell.
Families that owe money have until April 15 to pay the IRS.
If you can't make the payment by then you can file an extension or work out payment arrangements.
Updated: February 14, 2019 09:46 AM
Created: February 13, 2019 09:24 PM
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