With new tax codes on the books, many Americans are wondering how it will affect their tax refund. According to recent IRS statistics, the IRS saw a decrease in the number of returns that were filed while taxpayers saw an increase in their refund amount compared to 2018. With the tax laws always changing, it is important to stay up to date with the IRS filing guidelines, so you know what to expect for the next tax year. Optima Tax Relief reviews how the next year may compare and how to maximize your tax refund.
Deduction Changes in 2019
With several tax changes taking effect this year, it is important to research what deductions you qualify for because your money is important. One option is consulting with a qualified tax professional before filing your tax return. Some of the 2019 tax changes include:
- Higher threshold for medical expense deduction
- Elimination of the alimony deduction
- Higher contribution limits for certain retirement accounts
- Higher limits for HSA contributions
Check Your Withholding
With sweeping tax code changes last year, many Americans experienced frustration regarding the filing process, despite a slightly higher refund overall. A new W-4 form will be used starting in 2020, an attempt to modify worker’s withholdings to prevent racking up a tax bill at the end of the year. Taxpayers are encouraged to take a closer look at employer withholdings to ensure a refund, rather than a tax debt at the end of the year. You don’t have to wait to check if your current withholding is enough. Use the IRS Paycheck Checkup tool to ensure you are on track for 2019.
By taking advantage of qualifying deductions and adjusting your withholding, your refund for this next year could increase significantly.