Weren't Happy with Your Tax Return? Here's What You Can Change Now
It's tax day, and this year, because of changes in the federal tax law, a lot of people had some surprises when they filed their taxes.
So, what can you do to prepare for next year?
Erie News Now sat down with a local tax preparer, to find out what moves you can make right now, if you want to increase your return.
Last year, because of the Tax Cuts and Jobs Act, Americans probably saw more money in their paychecks, because the federal government was taking less, which hurt for those who rely on that big refund.
So this tax season, for many, that bigger paycheck meant foregoing a larger refund, or even having to pay the federal government, “They're withholding less tax from us, so our paychecks were bigger last year, unfortunately some people did notice it, some people didn't, but now when they come in to file taxes they're really noticing it because that's affecting their refund,” said Jason Williams, Office Manager at Liberty Tax Service in Erie.
Another big change this year, Williams says so many people were no longer able to itemize deductions, because the standardized deduction doubled, “That's where people have really gotten hurt… I have seen a lot of customers who used to be able to itemize and unfortunately this year they have not been able to, and that's really affected their taxes,” said Williams.
So, if you want a bigger refund next year, there are some steps you can take right now.
Williams says sit down with your employer and take a look at your W-4, that form lets you change how much the federal government keeps from each one of your paychecks.
You can change your withholding amount for the rest of this year, which can have a big impact on your next refund, “You want to adjust your W-4 with your employer, make sure they're taking the most taxes out, depending on your tax situation. If you have dependents only claim on your W4 the number of depends you have, if you have no dependents, make sure you're claiming single and zero, or married and zero on your W4 and with your employer,” Williams explained. “If you're already at single and zero, and it's not working out, then you have to ask them to withhold an extra amount each week from your pay,” Williams continued.
Something else you can do right now? Williams says you can put more towards saving for your future, by contributing more to your 401K or IRA, “The 401K, when you contribute to that, that's not taxable on the federal part of it, so that will lower your actual federal income, so it does benefit you on your tax return, also you can make contributions to an IRA.”