The IRS has begun accepting tax returns, but a new study shows many aren't ready.
This is the first filing season that taxpayers see the full effects of the new tax laws. According to a study from NerdWallet, taxpayers still don't understand the new changes.
Only half of Americans were aware that a tax bill was signed into law in 2017, and 48 percent of taxpayers don't understand how the law affects their tax bracket.
This year people will likely see significant changes to their return, as the Tax Cuts and Jobs Act goes into effect. Among the changes, was that the standard deduction nearly doubled.
"The biggest thing people notice this year is a standard deduction, so a lot of the smaller taxpayers the standard deduction was raise significantly," said Michael DePietro, a Certified Public Accountant at Rinehard Fitzgerald & DePietro in Utica. "So there's a $12,000 deduction for individuals, $24,000 for married filing joint, so a lot of people who file before and just hit the itemized limit or standard deduction limit they're going to see a big deduction in that."
Also new this year, some small businesses owners might qualify to save some money.
"If you own your own business, if you're either self-employed or your a partnership or shareholder you're going to find that there's a good chance that you get a 20 percent deduction on that income, and essentially only pay 80 percent tax on your income," he said.
This year the Child Tax Credit doubled from $1,000 to $2,000 per qualifying child.
DePietro added that it's always best to file sooner, rather than later.
"File early, the earlier you file the faster you get your refund even if you owe money it's probably a good idea to file early,” he said. “You have until April 15 to pay what you owe so there's no sense in procrastinating," he said.
Tax refunds should arrive six to eight weeks after filing.
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