Withhold too much, and your pay will go down. But you’ll probably get a refund next year.
The IRS warned taxpayers that they needed to revisit their withholding in 2018, especially due to lower tax rates, the elimination of personal exemptions and changes to itemized deductions.
“When the new tables rolled out, the withholdings went down across the board,” said Sharif Muhammad, CPA and certified financial planner at Unlimited Financial Services in Somerset, New Jersey. “People don’t pay attention to their paystubs.”
Unreimbursed employee expenses: This now-suspended tax break is part of a group of miscellaneous itemized deductions, which you were only able to claim to the extent they exceed 2 percent of your adjusted gross income.
The inability to deduct unreimbursed employee costs hit clients in a range of industries, from traveling salesmen to construction workers and pipefitters, CPAs said.
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“It’s not unusual to see a pipeliner with $30,000 to $40,000 in unreimbursed employee expenses,” said Jeffrey A. Porter, CPA at Porter & Associates in Huntington, West Virginia. “They travel in a three- to four-state area, and those guys are getting hit hard.”
$10,000 cap on state and local income tax deduction: Clients on the coasts, particularly in high-tax states such as New Jersey and California, aren’t able to deduct as much of their state and local tax burden.
The top three counties with the highest average property taxes were Westchester County, New York ($17,392); Rockland County, New York ($12,925); and Marin County, California ($12,242), according to ATTOM Data Solutions.
In all, nine counties have an average property tax bill exceeding $10,000, ATTOM found.
“The whole game of prepaying your real estate taxes and claiming a deduction doesn’t pay anymore,” said Herron.