Tax filing season: What to expect with new tax law in place

47 ABC – With a new tax law this year, the idea of putting more in your pocket, may not come true.

According to the CG Accounting Group, you may see a smaller refund than you’re used to this filing season.

Accountant Seth Place says, “They changed the withholding calculation in pay checks so 2018, paychecks may have gotten bigger, tax payers may noticed that but that just means less tax was being withheld.”

But if you owe some money, the IRS may cut you some slack. “If you didn’t pay enough with withholdings or pay enough in tax payments they could penalize, but they’ve gotten a little more relaxed this year because of the changes in withholdings,” Place tells us.

And that’s not the only change this year. This year for the majority tax payers, it’s going to be simpler because of the increase deduction and elimination of miscellaneous deductions. Because of this, most taxpayers’ filing process will be much easier.

Taxpayers will either take the standard deduction, which is $24,000 for a married filing jointly return, or an itemized deduction, whichever is higher. The Tax Foundation estimates that almost 90% of taxpayers will be taking the standard deduction because the new tax law has made it more difficult to itemize.

But the process may not be as easy for business owners, as a new qualified business income deduction had been introduced. This is a flat 20% deduction against qualified business income, but has limitations once the business owners’ income reaches certain thresholds. These limitations can reduce the deduction below 20% or eliminate it completely.

Tax filing season will start January 28th.

Categories: Local News, Maryland, Money