“Stunned at Your Refund?”
Filed your taxes yet? Disconcerted by the results of your return if you have?
With the 2018 tax filing season currently in full swing, many of you non- procrastinators who have completed your 2018 returns have been flat-out surprised. The new Tax Cuts and Jobs Act (TCJA) the most sweeping update to the U.S. tax code in more than 30 years, looks, on the surface, to have had a negative impact on many taxpayers, with refunds being either greatly reduced, or for some, even worse: a debt now owed to the IRS.
However, we oftentimes forget there are two sides to virtually every story. Because, while a number of taxpayers have experienced a negative change in their actual income tax refund, many did not notice that the tax withholding on their paychecks also changed (decreased) last year, affecting their overall federal tax liability. Put simply, some people have been getting bigger paychecks thanks to TCJA, and this has affected their refund status.
For approximately two-thirds of the taxpayers in the country, the overall federal income tax liability for 2018 has actually decreased, but it has not felt that way for many. Taxpayers in high tax states like California and New York are upset about losing many of their itemized tax deductions, specifically two of the most popular: the SALT (state and local tax) deduction and the mortgage interest deduction. However, what has been overlooked is the overall net economic benefit of the new and much higher standard deduction (not to mention much less time being spent in completing their tax return):
If you feel stung as you prepare your 2018 income tax return, have questions about how to minimize your obligation to the IRS, or would like an expert opinion on managing your current and future tax circumstances, do not hesitate to contact us. Our Director of Tax and Financial Planning, Steve Pitchford, continues to be an amazing expert resource, is here to serve, and happy to collaborate with you and/or your tax advisor.
Closer to home, the entire Towerpoint Wealth team took a full day away from our responsibilities at the office to roll up our sleeves and help the Sacramento homeless community, volunteering to prepare and serve lunch at Sacramento Loaves and Fishes.
It was a productive, sobering, and rewarding day of giving back to the local community and to those in great need, and we look forward to continuing to cultivate the TPW culture of volunteerism and of community outreach and support.
Click HERE to see additional photos of our day posted to the Towerpoint Wealth Facebook page (don’t forget to follow us as well).
Lastly, we encourage you to take three or four minutes to review the curated content found below, highlighted by:
- A well-written article discussing the “gold nuggets” of the tax world, tax credits
- Our recently-published white paper discussing Responsible Investing
- A handy iPhone/Android app that allows for seamless coordination of all travel-related details and information
We encourage you to reach out to us (info@towerpointwealth.com) with any questions, concerns, or needs you have. The world continues to be an extremely complicated place, and we continue to be here for you, and look forward to connecting with, helping, and being a direct, fully independent, and objective expert financial resource for you.
