tax

Why that IRS calculator might not be enough to pinpoint your 2019 tax liability

Taxpayers are expected to submit about 153 million income tax returns for 2018, according to the IRS. The loss of certain itemized deductions, as well as failure to withhold the right amount last year, may have led to some surprises for taxpayers this spring. You’ll need accurate inputs to get the best results from the IRS withholding calculator. Even then, it doesn’t tell you how to best withhold for state taxes.

Here are 6 tax breaks you’ll lose on your 2018 return

Under the Tax Cuts and Jobs Act, the standard deduction increased to $12,000 for singles and $24,000 for married filing jointly in 2018. Nine out of 10 filers are expected to take the standard deduction for 2018. A number of itemized tax breaks are now limited, including a new $10,000 cap on state and local tax deductions. Others are gone.

Here’s why the average tax refund check is down 16% from last year

The Tax Cuts and Jobs Act, which took effect in 2018, led the IRS and Treasury to adjust the tax withholding tables, which factor into the amount of income taxes withheld from your pay. The average refund check is $2,640, down more than 16 percent from last year, according to the IRS. Have a side gig? Do you have dependents? Did you itemize deductions in the past? Review your withholding.

Here’s why getting exactly zero back from the IRS might be a good thing

In Montana, nearly 8 percent of filers paid exactly what they owe on their 2016 taxes — resulting in no refund and no tax bill from the IRS, according to an analysis by SmartAsset. About 3 out of 4 taxpayers received a refund for their 2016 taxes, while close to 20 percent underpaid and wound up owing the taxman. Received an outsized refund or a large bill from the IRS? Review your withholding at work.

Five ways to jump-start your tax return

The IRS is expecting to receive more than 150 million individual income tax returns for the 2018 tax year. Most eligible filers are expected to get their refunds in less than 21 days, but additional review could lengthen the process. Mid-February to early March is the ideal time to gather your items and review them with your accountant.

One surprising way to beat the SALT deduction cap: Move to a nearby town

A new cap on the deduction for state and local taxes has prompted some New Jersey residents to shop around for lower property taxes. The surprise for these surburban New York City residents: Moving to one nearby town enabled them to substantially reduce their bills. More homebuyers will likely put lower taxes on the top of their priority list once the full effects of new federal tax rules become clear.

Don’t lose your refund — or your shirt — to these common tax scams

Just as sure as Tax Day comes every April, scammers will try to cheat individuals out of their refunds and important personal financial information. Watch out for fraudsters who try to obtain your personal information by impersonating the IRS or who ask you to divulge more details than necessary. Be wary of tax professionals who promise too good to be true results or who are willing to embellish the truth for bigger refunds.

Here’s who is most likely to get a bigger tax refund this year

Tax refunds checks are 8.4 percent less compared to this time last year, thanks to changes ushered in by the Tax Cuts and Jobs Act. While many individuals could receive less back or even owe the IRS, there are still some who will actually receive bigger checks this year. Even if you do get more money back, that’s not all bad news, according to one tax expert.

Why you shouldn’t celebrate that big tax refund

As of the first week of the filing season, the IRS issued an average refund of $1,865. That’s down from $2,035 last year. The new tax law lowered individual income tax rates, roughly doubled the standard deduction, and limited itemized deductions. A large refund suggests you overpaid on taxes in the prior year.

3 tips to help you boost your tax-free income in retirement

Roth IRAs and Roth 401(k) plans provide investors with an opportunity to pay taxes on savings now, have it accumulate tax-free and take withdrawals without taxes in retirement. In 2019, you can put away up to $19,000 in aggregate in your traditional 401(k) and Roth 401(k), plus $6,000 if you’re 50 and over. There are tax implications when you contribute to these accounts, so talk to your financial advisor or accountant.

If you failed to withhold enough tax in 2018, the IRS has a nasty surprise for you

Some early filers took to Twitter to complain about owing taxes or receiving smaller refunds after submitting their 2018 tax returns. As part of the Tax Cuts and Jobs Act, the IRS and Treasury adjusted the tax withholding tables, which affects the amount of income taxes withheld from your pay. Be sure to review your return and your paycheck to ensure you’re withholding sufficient pay in 2019.

These three tax breaks for 2018 are still up in the air

Elected officials must clear a package of breaks in order for you to claim them on your 2018 taxes. These so-called tax extenders include deductions for mortgage insurance and college tuition and fees. You can either wait to file, or you can submit your Form 1040 to the IRS now and file an amended return later if these breaks are renewed.

Betting on the Super Bowl? The IRS will want a piece of your winnings

If you place your bet at a casino in one of the handful of states that now allow sports betting, you’ll face federal tax withholding if it’s above a certain threshold. You also might receive a W2-G from the casino or a 1099-misc from your fantasy sports league host. Both of those forms also get sent to the IRS. And yes, even when you win in a casual pool or at a party, you’re expected to report it as income.

Bitcoin investors lost big in 2018. Some don’t plan on telling the IRS

Just around half of bitcoin investors definitely plan to report their losses to the IRS, according to a survey. Failing to report your investment losses and gains could have big consequences, said Kevin F. Sweeney, a former federal tax prosecutor. “The IRS has been unequivocal in its intent to crackdown on unreported crypto and is beginning to acquire the records and resources to go after non-compliant taxpayers,” Sweeney said.

This retirement plan feature can help you save on taxes — if you can find it at work

Nearly 85 percent of employers polled by Callan, an investment consultant, offer Roth 401(k) accounts, which allow you to save after-tax dollars and take tax-free withdrawals in retirement. About half of those companies said they allow workers to roll pretax savings into a Roth account that’s in the same plan. In 2019, you can contribute up to $19,000 — in total — in a Roth 401(k) and a traditional 401(k). Kick in $6,000 more if you’re 50 and up.

What to know before you take an advance on your tax refund

In 2017, taxpayers took out more than 1.7 million so-called refund anticipation loans, or RALs, up from 1.5 million the year before, according to a 2018 report from the National Consumer Law Center. Demand could be higher this year as a result of the government shutdown. Yet refund-advance products can carry high fees, and consumer advocates warn they should be used only as a last resort.

Tax Day is here. How to make sure you’re all set for the IRS

This spring marks the first time taxpayers are filing under the Tax Cuts and Jobs Act. The 2018 standard deductions is now $12,000 for single filers and $24,000 for married filing jointly, and itemized deductions have been limited. You can file for a six-month extension to submit your return, but you must pay the 2018 taxes you owe by midnight Monday.

Lost these tax breaks on your federal return? Your state might let you have them

The Tax Cuts and Jobs Act raised the standard deduction to $12,000 for singles and $24,000 for married-filing jointly. Fewer people are expected to itemize on their returns. Many states will still allow you to itemize deductions on your state return — even if you take the standard deduction on your federal return. Tax breaks allowed on state returns include real estate taxes, unreimbursed employee expenses and deductions for federal income taxes paid.

Three reasons why your 2018 tax season is painful — and how to get right for next year

The average refund for the 2018 tax year is $2,915, as of March 22, according to the IRS. It’s down just $10 from the average refund check a year ago. This season marks the first time taxpayers are filing under the new Tax Cuts and Jobs Act, an overhaul of the code that doubled the standard deduction and eliminated personal exemptions. Owed money this year? Crack open that 2018 return and see what you can do differently.

What the Wyden-proposed tax on unrealized capital gains might mean for you

Sen. Ron Wyden, D-Oregon, has proposed a tax rule that would mark-to-market the investments held by wealthy people, subjecting any gain to a tax each year. Appreciation would be taxed at the same rate as all other income — up to 37 percent. Potential hiccups include having sufficient liquidity to cover the tax bill and taxing hard-to-value assets, including privately held businesses.

Residents in this metro area saw their taxes rise by more than $2,600

The average property tax bill has gone up by $481 between 2007 and 2017, according to an analysis of real estate tax data by ValuePenguin. California homeowners in the San Jose-Sunnyvale-Santa Clara region had the steepest increase in taxes over that period: a median rise of $2,625. Rising home values in your neighborhood, as well as new construction and reassessments, all have an impact on your property tax bill.

Federal tax breaks for donating to these state-run funds are on shaky ground

The Tax Cuts and Jobs Act imposed a $10,000 limit on the state and local tax deduction, prompting some states to establish charitable funds. A rule from the Treasury and IRS that will address these “workarounds” is now in its final stage and under review at the Office of Information and Regulatory Affairs. This regulation could have a chilling effect on pre-existing charitable tax-credit programs in more than 33 states.

Michael Avenatti allegedly made this tax slip-up. How to avoid it

Avenatti, formerly a lawyer for adult film star Stormy Daniels, is facing federal wire fraud and bank fraud charges. The attorney allegedly didn’t file tax returns for 2011, 2012 and 2013, and failed to make estimated tax payments in 2012 and 2013, the U.S. Attorney’s Office in Los Angeles said. Taxpayers who fail to file an income tax return face a penalty of 5 percent of taxes owed for each month the return is late.

4 things you might not know about the new tax law

Many taxpayers are still uncertain about how the new tax code affects them, according to a study by online investment company Betterment. More than 8 of 10 people polled do not know the new standard deduction for single tax filers — $12,000. Two-thirds of respondents incorrectly said that Americans can claim a personal exemption in 2018.