With tax season winding down (FYI the deadline is April 15), are you feeling a little shell-shocked after filing your 2018 tax returns? Did you receive a far smaller refund than in past seasons? Or get slapped with a huge tax bill? Or maybe even didn’t get a tax break you had in seasons past?
Such a buzzkill, right? Well if you are feeling a little down and out about your 2019 filing, you are not alone. Initial reports are showing that tax refunds are down—by as much as 16.8 percent. The IRS is expected to release several reports before the tax season wraps up.
So why are refunds down and bills increasing? Last year we saw some of the biggest changes to the tax code in decades. Changes include: lower tax rates and changed income ranges for both married joint filers and single filers, the alternative minimum tax exemptions increased, increased standard deductions, and the list goes on.
Still haven’t filled? There are still steps you can take to help reduce the amount you owe or potentially increase the amount of your refund. Here are four things to consider before filing your return:
Individual Retirement Account Contributions- You can still make tax-deductible contributions to an IRA. You have until April 15 to contribute to your IRA and still deduct from the 2018 income.
Invest in “Opportunity Zones”- Investing capital gains into qualified opportunity funds will allow you to defer taxes on these profits.
Changes In Accounting Methods- For self-employed taxpayers and small business owners, changing the method you use for your business accounting from accrual to a cash basis can save on taxes.
Qualified Business Deduction- If a sole proprietor or business owner earns less than 315K, they can take a full 20 percent deduction on income before they itemize their other deductions.
Already filed? Revisit Your withholding taxes. Making any changes sooner rather than later will help buffer for the 2019 tax year. For many taxpayers, that means making any adjustments to their W-4 withholdings.
If you are one of the lucky ones and are expected to get a federal refund, below is the IRS Refund Calendar:
About the Author: Taylor Genter
Taylor is the Marketing Specialist at Extract with experience in data analytics, graphic design, and both digital and social media marketing. She earned her Bachelor of Business Administration degree in Marketing at the University of Wisconsin- Whitewater. Taylor enjoys analyzing people’s behaviors and attitudes to find out what motivates them, and then curating better ways to communicate with them.