As tax season marches on many Americans have already filed their required returns but the results have been somewhat surprising. With new tax laws many anticipated getting a sizeable return this year but that hasn’t been the case - although it isn’t necessarily the result of less money in your pocket because many people received far more through their regular paychecks during the calendar year.
There is no denying the tax rate is down and this change caused many individuals to receive more weekly, bi-weekly, or monthly - depending on how they receive payment. The result, especially for those who have grown accustomed to receiving sizeable refunds in the spring, was less money from a tax refund because more was received throughout the prior year. These changes could lead individuals to consider making an adjustment on their W-4 withholding, but should you? First, don’t rush to judgement, examine the differences before making a decision.
While the reason for a smaller refund may be the result of a reduced tax rate, withholding more during the year may not be in your best interest. A refund, although maybe not what one has grown accustomed to, is still a benefit and due because of the amount paid in throughout the year. Changing your withholdings could give you a slight boost in the spring but it may not be as sizeable as the difference between receiving your prior amount throughout the year.
Even with average refunds down almost 17-percent
, any changes would essentially only be beneficial to the federal government instead of its citizens. By voluntarily providing more money for the government during the year, the payday back at the end may change due to a variety of other factors. For few, are the tax implications identical from year to year - hence the need for professional assistance with many filings.
Opposite, if you find yourself owing money when you may have previously received a sizeable refund, making a change to the W-4 could make a difference. Ask questions to find out what or how much you need to plan for withholding to avoid ending the year still owing the federal government.
Tax refunds are shrinking
and individuals who have grown accustomed to relying on a refund in the spring to help boost a savings account, pay down other bills, fund a vacation, or make a purchase are instead having to pay. This change typically occurs for people who may have had smaller refunds the year prior but the truth is a variety of different factors contribute to the tax footprint of individuals throughout the year. By evaluating your expected tax imprint for the next year, a good plan can be developed in order to avoid any surprises next season.
The tax experts at Bloch Rothman and Associates
are ready and willing to assist with all of your questions and filing needs, including help with any questions you may have regarding the new tax laws and how they have had an effect on your annual tax filing. Serving Denver and the surrounding area for 35 years, our firm has an extensive history in helping clients with any and all of their tax issues or dealings with the Internal Revenue Service. If you have questions about your personal, business, estate or any other filings, don’t hesitate to contact us
today. Available for all of your tax needs and filings there are also a number of bookkeeping and payroll services offered to assist you and your business. We look forward to meeting you and serving whatever your needs may be soon!