December 26, 2018 11:23 PM
Families beware - Financial experts say now is the time to start preparing for tax season. Because of recent changes to the tax code many of us will be getting a much smaller return, or in some cases, even end up owing money.
According to the IRS, 90-percent of taxpayers actually took more money home in their paychecks this year because the reform changed what was withheld in taxes.
That is just one of many changes that could end up costing you in 2019
the financial expert adds most positives in the first-time filings under the new tax law land on business owners... the small business owners will see a decrease in the tax-impact on their business income.
jim schnell: “That could lead to a lower refund or in some cases, depending on how the taxpayer utilized the withholding tables during the year, they may owe a little money back this year,” said Jim Schnell, local tax expert of Rochester-based accounting firm Mengel Metzger Barr & Co.
Divorces will also be more expensive so Schnell says if you're in a split you may want to finalize paperwork by December 31.
In the New Year, alimony payments will no longer be tax-deductible for the payer. Payments will also no longer be considered taxable income for the payee.
“Economically tax laws helped with that shift so not having that deduction will make that process much more challenging for families,” said Schnell.
The change will likely lead to smaller alimony payments going forward since the person paying them can no longer benefit from the deduction.
The change will generate nearly $7-billion for the IRS over the next decade.
Under the Tax Cuts and Jobs Act, it will also be harder to claim tax deductions for charitable donations.
With the standard deduction nearly doubling for taxpayers less people will benefit from donating to charity.
“You're seeing the concept of bunching going on for two or three years in order to get a tax benefit,” said Schnell.
Created: December 26, 2018 11:23 PM
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