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Want a Bigger Tax Refund Next Year? Do This.

If you were caught off guard by a smaller tax refund this year… we’re here to help make sure that doesn’t happen again next year.

Gilmore Jasion Mahler CPA Charlie Heid appears monthly on WTOL-TV in Toledo, tackling various tax and money issues… and in his March, 2019 appearance he spelled out what you need to do, and it’s really quite simple. He says you need to update your W-4. You remember that form, right? The one we all fill out when we start a job… then totally forget about it?  

We fill out a W-4 so that our employers withhold the right amount of federal income tax. Ask for a copy of your W-4 at work to confirm your current withholding.

If you saw a decrease in your tax refund this year, Charlie says you likely need to decrease your allowances, in other words, have more tax taken out of your pay so you have a bigger refund come April 15th of 2020.

A quick reminder that the reason that we saw this change this year with smaller refunds was due to tax reform. Less money was taken out of your check in 2018, so you may recall that you got that bump in your paycheck, but now you’re seeing that translate to a smaller refund.

Here are some examples of how you can adjust your W-4 moving forward.

Example 1: Single person, no children whose refund was smaller than they’d like.

 

That single person would typically enter one (1) allowance (line A on the W-4 worksheet above) for him or herself and one allowance (line D) for a total of two allowances. Now, if that person wants a bigger refund, Charlie suggests they try claiming only one allowance and see what that does to their paycheck… or they could claim zero. He says the important thing to remember is the less allowances that you have on your W-4, the more money that’s withheld from your check and the more you’ll get back come April 15.

Example 2: Married man with one child, filing jointly and making $100,000 a year.

That man would typically enter one (1) on line A (of the W-4 worksheet) for himself. He would enter a one (1) on line B because he is married filing jointly. He would typically enter a four (4) on line E for that one child. That adds up to a total of six (6) allowances. But, if he wants a bigger refund than he got this year, Charlie says he would suggest reducing the number of allowances from 6 to perhaps 3 and see how that impacts his paycheck. 

Key points:

Want a bigger refund?

  • Need more money taken out of your check
  • Need to decrease number of allowances on W-4
  • That will result in more tax withheld from your check (and a bigger refund)

 The IRS has a withholding calculator to help you do a “paycheck checkup” and fill out your W-4.    

Charlie recommends that everyone revisit their W-4 at least once a year. He says you may also need to adjust your W-4 if you have a big life change such as:

  • Your spouse stops working
  • You get a divorce
  • You have a new baby

Any time you’d like to update your W-4, he says just request a copy from your employer, update it, and resubmit to your employer. You can find the W-4 here on the IRS website.

Charlie has one parting thought about adjusting your allowances to have a bigger refund: really, he says, your goal is to come as close to a wash as possible… where you don’t owe, and the government doesn’t owe you. That being said, many people don’t view it that way and want that big refund, so in that case, he says, don’t be afraid to tinker with your allowances. You can change your W-4 form as often as you want until you’re satisfied with the amount of money coming out of your check.

CPA Charlie Heid is a partner specializing in tax services. He has been with Gilmore Jasion Mahler for 17 years and appears monthly on WTOL 11 Your Day to cover tax and money topics.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

Business Valuation: What to Look for in an Expert

You know you need a business valuation, but who should do it and how in depth should it be? Gilmore Jasion Mahler Partner Jeff Denning specializes in business valuation and says be aware that the IRS or a court of law will have some requirements when it comes to the valuation, and who does the work. He offers some ideas on how to go about choosing the right person for the job.

Who does a valuation for your business is one of several important questions as you begin to research the process. For more information, see GJM's video blogs How Do You Figure Out the Value of Your Business, Business Valuation: Lengthy Report or Not, and What is the Business Valuation Process. Learn more about Jeff’s expertise in business valuation and forensic accounting, and don’t forget to sign up for GJM’s free quarterly newsletter The Expert with a focus on business valuation and litigation support. Just click here for quick and easy sign up.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities

Meet the Face of GJM’s Findlay Office

Tracy Kennedy Gilmore Jasion MahlerWhen new people come on board at Gilmore Jasion Mahler, LTD we ask them to fill out a fun questionnaire to help our people get to know them a bit better. We’ve started sharing those in Q&A format on our blog so that our clients and the rest of the GJM community can enjoy them as well. They’ve been well received so we expanded to feature other “GJMers” as well. Today is your chance to get to know Tracy Kennedy a bit better. You could say Tracy is the “face” of GJM’s Findlay office. That’s because she’s often the first person you meet when you walk in the door.  

Describe your role at GJM: Director of First Impressions

When did you start employment/will you start at GJM? August of 1997

Why did you choose the accounting industry? It chose me!

What is the nature of your work at GJM and what do you like best about it? I started as the morning receptionist but in the past 21 years, my role has expanded. I have become support staff for the tax and healthcare departments. I have been the marketing assistant. I feed the staff and keep them happy during busy season. I help our elderly clients with their tax work, as it can all be very confusing. I have organized company events small and large.

GJM is quite involved in the community. Any particular programs or volunteer work you’ve enjoyed being involved in here? I run the Children’s Mentoring Connection Christmas party that GJM supports every year. I also run our Adopt a Family through Hope House every year at Christmas. The most work but the most rewarding has been being the point Findlay person for our Carnevale event to benefit Flag City Honor Flight the past two years. (The event returns in November of 2019 rebranded as "Wanderlust" so stay tuned for details!

Are you from the Northwest Ohio area originally? If not, where are you from? I am from Findlay.

What do you like about living in Northwest Ohio? Findlay is a very supportive community. It’s a big, little city. If there is a need in the community the city, Chamber of Commerce, or a local non-profit jumps to action to help resolve the issue. Local companies are always willing to donate their time and treasure to make life better here.

Where did you go to school? Findlay High School and Ohio University

Do you have any pets, hobbies, family? Husband Jim, daughter Lena (21), son Ian (19), one dog Oliver that was recently featured as the Ohio Society of CPAs dog of the week!

How do you like to spend your free time? Hanging out with friends & family, volunteering, weekend trips, ballroom dancing with my hubby!

Are you involved in any community organizations, do any volunteer work? I am one of the coordinators of the local community dinners. My church (First Presbyterian of Findlay) serves anyone that needs a meal the 2nd Sunday of every month. I plan, prep, serve and clean up with other church volunteers. I’m a trustee with the Findlay Elks and a co-chair of the entertainment committee. I am an alumnus of Hancock Leadership and serve on the board and two committees. I have volunteered (and “volun-told” my husband) for community events for years and/or attended a large number of them. United Way, Arts Partnership, Camp Fire USA, Hope House.

What is something people may be surprised to find out about you? I LOVE 80’s alternative music but not big hair!!

What’s Going on with 2018 Tax Refunds?

Many people are scratching their heads this year, trying to figure out why their tax return is so much smaller. Some people who normally get a refund are actually finding themselves owing money. Gilmore Jasion Mahler CPA Amy Merkel explains what's going on.

Amy adds that If you prefer to have more withheld and receive that larger refund in April, you'll need to adjust your withholding going forward, otherwise, she says, the same thing will happen to you again with your 2019 tax return.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm's professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

What the New NAFTA Means for Small Business

New NAFTA small business USMCAOn September 30, 2018, the United States-Mexico-Canada Agreement (USMCA) was established after 13 months of negotiations. While the agreement is not currently ratified, the USMCA intends to replace the North American Free Trade Agreement (NAFTA), which has been in place since 1994. Ratification is expected to take place in early 2019.

The USMCA brings several changes to the economic relationship between the three North American countries. These include greater market access, inter-governmental cooperation mechanisms, and higher duty-free limits.

Everyone will feel these changes, not just major government agencies. Three provisions in the USMCA will particularly impact small businesses:

  1. The establishment of the Committee on Small and Medium Enterprise (SME) Issues
  2. The increase of the de minimis threshold
  3. Changes to the automobile industry

The Committee on SME Issues

Chapter 25 of the USMCA will establish a Committee on SME Issues. This committee will assemble within one year of ratification and will be comprised of government officials from the U.S., Canada, and Mexico.

The committee will assist SMEs in their transition to the USMCA, identifying strategies to boost their economic success and increase cooperation between markets. The committee will host an annual SME Dialogue, inviting experts, academics, employers, non-governmental organizations (NGOs), and other stakeholders to engage in conversation on SME issues.

Small business owners may benefit from the representation this committee will provide. However, this committee will only be comprised of government officials. Not implementing the committee effectively may cause the voices of small business owners to drown within a messy bureaucratic system.

The Increase of the De Minimis Threshold

The de minimis threshold refers to the quantity of product you can purchase online and import duty-free. The USMCA raises the de minimis threshold to $800 USD for United States products, $150 CAD for Canadian products, and $100 USD for Mexican products.

This increase can lead to significant benefits for small businesses, which often do not have the resources to pay customs duties and fees. This will increase sales volume, providing greater profits for small business owners.

The 75% Tariff-Free Threshold for Automobile Manufacturers

Under the USMCA, 75% of an automobile must be manufactured within North America to be exempt from tariffs. This is a significant increase from the 62.5% requirement under NAFTA.

This provides an incentive for automakers to decrease operations overseas. The new threshold holds the potential to provide more income for small, local auto parts manufacturers and to increase jobs for North American workers.

If you're interested in staying up on issues impacting the manufacturing world, consider signing up for Gilmore Jasion Mahler's free quarterly e-newsletter The Manufacturer. It addresses a broad range of financial topics impacting the world of manufacturing. Just click here for quick and easy sign up.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.