It has been a very interesting three weeks since the IRS opened the e-filing season. We are seeing varied results compared to last year and generally those results are less money coming back to clients as refunds. This causes a state of bewilderment and frustration to those who traditionally count on their refund for certain expenses. We understand that the news is surprising to those who have filed and worrisome to those who are still not ready to file. Although we cannot change the 2018 results, there is good news for 2019.
In researching the withholding tables for 2017 to 2018 and 2018 to 2019, I have found that the adjustment has been made. This means that there should not be a dramatic change in withholding for 2019 compared to 2018, unlike the adjustment that we are currently seeing from 2017 to 2018. While this may not be good news, we do have a couple of options for 2019.
Option #1: Keep everything the same and expect a smaller refund when filing for 2019.
Option #2: Review the withholding on your paycheck and make changes. Remember the smaller the number the higher the amount withheld! If you are already claiming Single with 0 dependents, you are able to request an additional dollar amount to be withheld. You can follow this link to complete a new 2019 Federal W-4 to change that withholding.
My free advice this Friday: Ask questions and be proactive. 2018 tax returns have been a surprise, but 2019 returns don’t need to be.