The biggest surprise for New York taxpayers this year? How small a refund they’re getting, said a spokeswoman for H&R Block.
But there’s an explanation.
The federal tax changes have actually reduced what most people are paying, said David Snyder, a partner in Bonadio Group, a certified public accounting and consulting firm with an office in Albany.
Lower federal rates and a new deduction for small businesses have given them a break. But that break often took the form of more take-home pay spread throughout the year.
That’s because the amounts for a given bracket on withholding tables also were reduced, said Snyder.
“You’re not going to notice” the weekly increases in your paycheck, he explained. But over 52 weeks they took a chunk out of what otherwise would have been a healthy refund.
And that’s what they noticed, according to Monica Glukstad, the H&R Block spokeswoman.
“While most people will come out ahead overall, it won’t feel that way for the people who will get a smaller tax refund, or will end up owing, because they got their tax reform benefit through bigger paychecks,” she explained.
Another change: “The vast majority aren’t itemizing at the federal level,” said Snyder. The $10,000 federal cap on the deductibility of state and local taxes, coupled with an increase in the standard deduction to $12,000 for an individual, or $24,000 for a couple, means that couples would have to come up with at least another $14,000 in charitable or other deductions to make itemizing worthwhile.
Snyder said New York state didn’t adopt the federal changes. And because it’s permitting filers to itemize on their state return, essentially “decoupling” it from the federal form, they’re at least getting some relief at the state level for deductions no longer permitted on federal returns.
The state Department of Taxation and Finance said it has processed 6.5 million returns since the end of January, on pace with previous years. Seven in 10 taxpayers hire a paid preparer, tax department spokesman James Gazzale said this week.
“When something significant happens, like a life change or tax law change, it’s a good idea to talk to a tax professional to make sure to handle the new situation properly and get all the possible tax benefits,” said Glukstad.
H&R Block sells its TaxCut software program, while the state tax department offers free user-friendly software for those with adjusted gross household incomes of $66,000 or less in 2018 at www.tax.ny.gov.
The state Department of Taxation and Finance also recommends e-filing as being safer and more efficient.
Tax filing deadline is April 15, less than two weeks away.
Published at Wed, 03 Apr 2019 16:00:12 +0000