Taxes

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

Unhappy with your 2018 tax return? Now’s the time to correct course to avoid the same outcome next year. You may even want to modify how you give.

This spring marks the first time that taxpayers are filing under the Tax Cuts and Jobs Act. The new tax law roughly doubled the standard deduction to $12,000 for singles and $24,000 for married joint filers, eliminated personal exemptions and limited certain itemized deductions.

Tax refunds, which were off to a slow start early in the season, are also approaching parity with last year’s figures. The average tax refund as of March 22 is $2,915, according to the IRS. That’s just $10 – or 0.3 percent – down from last year.

Refunds aside, accountants are still finding themselves the bearers of bad news to some filers who found themselves owing this spring.

“We’ve seen people who never owed and now they owe,” said Dan Herron, CPA and partner at Better Business Financial Services in San Luis Obispo, California. “I don’t think anyone had an understanding of what the tax reform dynamic would entail,” he said.

Have you hit a snag? Accountants have identified a few areas of the new tax law that tripped up some of their clients.

(Note that this story mentions “bunching” as a possible giving strategy. For more detailed information on this strategy, read this article, written by one of NCF’s experts.)

Read the full story at CNBC. 
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