If you haven't filed your 2018 tax returns, you're not alone. The latest IRS stats show both filings and processing are down compared to this time last year. There are also fewer refunds, which the Treasury Department says is because the new tax code gave taxpayers more take home pay instead of withholding too much in taxes during the year.
The new tax changes are supposed to make filing your return a lot more simple. But, as tax accountant Danelle Williams will tell you, that simplicity comes with a cost. One big hit for a lot of us is fewer sales and tax deductions.
"This is a big difference this year, in that there's a cap on the local sales and local taxes. It's called the SALT (Sales and Local Taxes)," Williams explained.
The new tax law sets deduction limits for sales taxes, property taxes, car license tabs and any state and local income taxes.
Now, you can only deduct $10,000 total. Williams says that's hitting a lot of her clients hard.
"I just did one yesterday where they lost almost $50,000 of deductions from last year to this year, because they're capped at that $10,000," Williams said, adding the issue is one that will likely be addressed by congress for next year, due to widespread taxpayer complaints.
You can also forget about some other deductions you might be counting on including non-reimbursed work-related expenses such as clothing, journals and periodicals and union dues.
"No tax preparation fees," said Williams. "No safe deposit box."
We can still deduct charitable contributions, and in most cases, all of our mortgage interest. But key deduction changes mean many of us won't need all the receipts we've counted on in the past.
Instead of itemizing, most of us can only take a flat standard deduction of $12,000 if you're filing single and $24,000 if you're married and filing jointly. Seniors get an additional $1,300.
If your medical, mortgage interest and other deductible expenses total more than the standard deduction you can itemize. Just make sure you have good records all the receipts.
Two important tips to help with next year's tax returns: