Based upon all the TV ads for H&R Block and Turbo Tax, I guess it must mean we are in tax season again. That would explain the piles of files on my desk and the weekends my team is putting in here at the office! So far, a couple trends are starting to appear.
First, people aren’t nearly as eager to get their tax filings done this year as they were last year. Across the board we are seeing people and businesses coming in later with their information. Perhaps its fear of the unknown, or maybe they know what lies ahead and are trying to avoid dealing with it. That works about as well as ignoring a tooth cavity, but hey, they say a bad plan is better than no plan.
Second, as predicted here last year, many taxpayers are seeing their taxes go up and/or refunds go down. The cap on State and Local tax deductions hits the middle class pretty hard in high tax states like California & New York. The swath of taxpayers affected by this is large, and was only partially offset by favorable changes to the Alternative Minimum Tax rules and overall rate reductions. We are currently seeing many taxpayers paying more in tax than before, and often these are people who aren’t the usual whipping boys when politicians start talking tax hikes. It’s all over the board, it just depends on your individual financial profile.
The takeaway here is that regardless of the expected outcome of your 2018 tax filings, you should get the calculations done soon so that you can prepare for the result, good or bad. Perhaps you can turn a bad plan into a decent one.