Watch Out. Tax Season Is Even More Stressful Than Usual.

Take a deep breath, a drink, whatever calms you: It’s tax season.

If you have already filed your return and received a satisfying refund, congratulations! You are a lucky person, because many people are having a hard time this year.

Oddly, much of the pain comes from a shift that might seem pleasant: sweeping changes that, while providing a windfall for the rich, still amount to a tax cut for most Americans. But, combined with the longest government shutdown in history, the short-term effects of these changes have been surprisingly disruptive.

Early returns indicate that fewer people than usual have been getting the refunds they expected. That has created an excruciating spectacle: Many people who paid less in taxes every week are discovering that they owe money to the Internal Revenue Service. On top of that, residents of states like New York, New Jersey and California face a new cap on federal deductions for state and local taxes, and won’t know whether their federal tax bill has gone up until they have slogged through their returns. What’s more, many tax preparers aren’t up to speed on all of the new breaks and burdens.

Good luck! It may be a rougher ride than usual. We can’t eliminate glitches, fatten your refund or make tax-filing a total pleasure. But we have covered the tax mayhem extensively, and prepared articles and tax software reviews, all in the hope that with our help, the ordeal will be easier and, at the very least, more comprehensible.

[Sign up for the Your Money newsletter, and get even more personal finance news.]


Image
CreditDelcan & Company

The most important changes to the tax code in decades have taken effect — and filers are confused. Plenty of people who counted on fat tax refunds are disconcerted when they learn that they are not getting them. For some thorny issues, especially those concerning small businesses, professional tax preparers are perplexed as well. We asked certified public accountants and other tax-prep pros to do their best and give taxpayers some clear answers.

READ MORE:


If you’re preparing your own tax return, you may benefit from expert help conveyed by top-notch tax software. The Wirecutter, a division of The New York Times Company that rigorously tests products, surveyed the offerings for this season. The reviewers made several recommendations, depending on factors like whether you run your own business and whether your financial situation is complex or fairly simple. If it’s very simple, they say, try H&R Block Free.

READ MORE:


Phones are fabulous for playing games and reading news apps. But are they effective at filing tax returns? Millions of people think so. Our reporter Tara Siegel Bernard gave phone-filing a test run, but she wasn’t impressed. She found the experience unpleasant, in parts, and had unanswered questions about how to fill out a model return. For her own family’s taxes, she will rely on a human accountant again this year.

READ MORE:


“In this world nothing can be said to be certain, except death and taxes,” Ben Franklin once said. Given those alternatives, the tax man usually looks good. Yet the particular tortures exacted this year may make the choice less obvious.

The wholesale overhaul of the tax law that is in place for people filing their returns would, on its own, have required the I.R.S. and tax experts to make many adjustments and give a great deal of new guidance this year. The partial government shutdown slowed the process considerably. And the early returns are including a larger number of unpleasant surprises for taxpayers — who owe money when they expected to receive refunds — than was the case in the past.

READ MORE:


Image
CreditDelcan & Company + Saad Moosajee

Only a year after sweeping changes took place, proposals to revamp the tax code — yet again — are rampant. From the Democratic side come calls for a more progressive system, requiring wealthy people to pay more, reversing the rise in income inequality that has been underway. Republicans, on the other hand, want to make the current tax rates — which are set to expire at the end of 2025 — permanent. The division of power in place in Washington means that you shouldn’t count on big changes this year. But the heated debates in Congress and on the 2020 campaign trail will give clues about legislation to come.

READ MORE:


Image
CreditDelcan & Company + Saad Moosajee

Wealthy people are reaping the richest benefits from the changes in the tax code, and many of them are rejoicing, as you might expect. But an affluent few are raging against a so-called reform that has put more money — a lot more — in their pockets. They were already doing quite well, they say, and don’t need extra help from the tax system: Poorer people need the money more. Some millionaires and billionaires, however, resent this kind of talk. Friends of the wealthy tax critics call them “traitors to their class.”

READ MORE:


Image
CreditDelcan & Company + Saad Moosajee

The 2017 tax bill provides a 20 percent deduction for “qualified business income,” which is a great boon for those who can get it. But who, exactly, qualifies? The rules are arcane, and I.R.S. guidance has been changing. Health, law, financial services, entertainment and consulting businesses don’t qualify, for example, but architecture and engineering do. In some cases, eligibility hinges on small details. Read on for some pointers.

READ MORE:


Image
CreditDelcan & Company + Saad Moosajee

By enabling affluent investors to postpone paying the tax man, new opportunity zone funds are starting to attract substantial sums. The funds are a tax break that was included in the 2017 tax law as a way of drawing money into distressed communities.

The idea is that investors get tax breaks, while the neighborhoods get new businesses and upgraded apartment buildings, shops and the like. But the areas that have been designated as distressed are not always really needy. The vibrant Long Island City neighborhood where Amazon proposed placing its campus, a plan it has abandoned, was designated an opportunity zone, for example. And even when neighborhoods are truly distressed, providing tax breaks for the rich may be an awkward way of redeveloping them.

READ MORE:

Sign Up for Our Newsletters

Get notified of the best stories everytime.

You May Also Like

Nationwide Manhunt For Suspect Behind Pipe Bombs Sent To Democrats, CNN

The discovery of five pipe bombs mailed to prominent Democrats, CNN and…

JPMorgan Chase Moves to Be First Big U.S. Bank With Its Own Cryptocurrency

In 2017, Jamie Dimon, JPMorgan Chase’s chief executive, declared Bitcoin a “fraud”…

“Belligerent” Brett Kavanaugh Started Bar Fight During College: Classmate

Future Supreme Court nominee Brett Kavanaugh and two fellow Yale University students…

Goldman Sachs will slow consumer loan growth if market falters

(Reuters) – Goldman Sachs will limit loan growth in one of its…