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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.

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.

The Government Shutdown & Your Tax Refund

It’s now day 28 of the longest shutdown of our federal government in history… and tax filing season is about to begin. Gilmore Jasion Mahler’s Charlie Heid tackled the topic in his monthly appearance on WTOL-TV.

Charlie says the good news is that all indications are right now that we won’t see a delay in getting our tax returns. The IRS says it has called back to work from furlough about 46 thousand workers, over half of its workforce, to process our tax returns. But it’s not exactly business as usual… Charlie says there are a few things we need to know.

#1: As of right now, the IRS helpline isn’t there as a backup to answer your questions. The government shutdown has closed that phone support service. If you call the IRS 1-800 helpline you’ll just get a recording saying it isn’t available. The IRS just announced earlier this week that it plans to open the call center back up with limited personnel in the coming days…but says if you do call, you need to expect long wait times. Also, IRS walk-in taxpayer assistance centers are closed.

#2: This is the first year we’re filing our tax returns under an overhauled tax code… the biggest changes we’ve dealt with in decades. There’s a new 1040 form, with schedules attached. People are going to have a lot of questions… and they just need to be prepared for the fact that, if the government shutdown continues, they may not be able to reach the IRS for help.

Charlie recommends that people file earlier rather than later. That way if you get stuck on something, you have time to do some research and figure it out before the April 15 deadline.

Something else to keep in mind: the dollar amount of your tax refund could look different this year because of the new law. Tax reform has drastically changed exemptions, deductions, etc. People who are used to getting a certain amount back every year could have a rude awakening. For example, someone who typically gets a refund of $3,000 could wind up with a much smaller refund… or could even owe money. That’s why the IRS has been encouraging people all year to get with their employers to double check that the right amount of tax is being taken out of their paychecks. Charlie says those who haven’t done could have an unwelcome surprise.

Here’s a quick recap of some of the biggest changes in the tax law for the 2018 tax filing year:   

  • Bigger standard deduction
  • Capped deduction for state and local taxes at $10,000
  • Increased child tax credit

Tax filing season starts January 28… that’s a week from Monday. That means the IRS will be accepting and processing tax returns starting January 28th. Charlie says you should file electronically with direct deposit if possible. The IRS says that will speed up the process… and if you are getting a refund, you’ll see it sooner.    

CPA Charlie Heid is a partner specializing in tax services, who joined Gilmore Jasion Mahler in 2002. He serves clients across many industries, with a focus on manufacturing & distribution. Charlie appears monthly on WTOL-TV to discuss tax and money issues.

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.

GJM Staff Announcements

Gilmore Jasion Mahler, LTD (GJM) has announced some key promotions and new staff members that strengthen the Firm and its leadership team. The promotions are effective January 1, 2019.

Judy Anderson Gilmore Jasion MahlerJudy Anderson and Matt Cavanagh are promoted to partner. Anderson, a Toledo native and graduate of The University of Toledo has been with the firm for 11 years. She has over twenty years of experience in public accounting and in the healthcare industry. A member of Gilmore Jasion Mahler’s healthcare and outsourced accounting group, she works with many of the Firm’s healthcare clients providing practice management and consulting services.  

Matt Cavanagh Gilmore Jasion MahlerCavanagh, a Bowling Green native and BGSU graduate, joined Gilmore Jasion Mahler in November of 2005. Also a member of the Firm’s healthcare team, Matt’s focus is healthcare services. His expertise is in ambulatory surgery centers, outsourced accounting, practice management and modeling.

“Judy and Matt are already valued members of our leadership team,” says Gilmore Jasion Mahler Managing Partner Kevin Gilmore. ”Their hard work and dedication have strengthened our healthcare specialty and the Firm as a whole. I’m thrilled to see them both reach partner level.”

Nikki Clement Gilmore Jasion MahlerThe Firm also announced some other key promotions. Partner Nikki Clement has been named managing partner of Gilmore Jasion Mahler’s Findlay office. Partner Mike Brough will lead growth efforts for the Findlay office. Nikki Clement's focus is the utilities industry. She specializes in accounting for regulated utilities.

Mike Brough Gilmore Jasion MahlerMike Brough works across a number of industries including manufacturing & distribution, government, and nonprofit operations.

Steve Miller is being promoted to senior manager. Both Ryan Avery and Ryan Emerson are promoted to supervisor and Nick Jackson is promoted to senior associate.

Earlier in the year, Diane Stretten and Mary Jo Pitzen were promoted to senior manager. Andrea Jennex moved up to supervisor in the GJM Findlay office. Ben Lochbihler was promoted to manager and Corey Selhorst, Lauren Grana and Clay Barron were all promoted to senior associate.

The Firm also brought on well over a dozen new employees in 2018 to further strengthen GJM’s administrative team and client service. They include Elijah Blackburn, Alyssa Essert, Alexandria Frances, Courtney Haas, Nicole Hartranft, Jennifer Henning, Dana Herr, Thomas Keyser, Jessica Knepper, Dylon Lause, Wendy Long, Tim Merkel, Madeline Mielcarek, Caleb Neeper, Joe Osentoski, Tina Rochowiak and Logan Sager.

“I couldn’t be happier with the staff we have in place headed into 2019,” says Gilmore. “When you have great people, great things happen. I’m excited to see what we can accomplish at a team.”

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.

Three Ways to Lower Your 2018 Taxes

As you race to get all your shopping, wrapping and baking done in time for the holidays, you may want to set aside some time to think about your tax return. Some action now could wind up saving hundreds or maybe even thousands of dollars when you go to file your tax return next spring. Gilmore Jasion Mahler Tax Partner Charlie Heid shared some suggestions on WTOL-11, including three ways to lower your taxes before the end of the year. 

#1: Bunch or bundle your charitable contributions

With the new higher standard deduction, which is now $12,000 for individuals and $24,000 for joint filers, smaller charitable donations will no longer get you that tax break that they used to. Many more people will now be taking the standard deduction, and itemizing their deductions won’t apply.

You don’t have to stop giving to charity, just change up your timing a bit. For example, rather than donating $15,000 a year, bump that up to $30,000, but do it every other year instead.

#2: Finalize the divorce

Another change that the new tax law brought will affect anyone going through a divorce right now.  

The big impact will be for the person who will be paying the alimony once the marriage is over.  

If you’re in the process of a divorce and still finalizing the agreement, be aware that December 31, 2018 is a critical deadline… if you finalize the divorce before the 31st any alimony paid can still be deducted, and alimony received is still considered taxable income. After December 31, that alimony paid will no longer be deductible, nor will it be taxable for the recipient of the alimony. So if you’re in the process of a divorce, and you’re the one who will pay alimony, you want to get it finalized before the end of the year.

#3: Feed the 401k

You can protect a good portion of your income from taxes by moving it into a 401k. You won’t pay tax on the money until it is withdrawn during your retirement. You’re allowed to contribute up to $18,500 to your 401k this year. If you’re over 50, you can contribute up to $24,500.

If you don’t have a 401k you can put the money into an IRA. The great news with the IRA is that you have up until April 15th of 2019 to move the money to that IRA and still have it count as a 2018 contribution.

One final thought: If you sold any investments this year and made money, you may be looking at paying capital gains tax… you could take a look at any of your holdings that show a loss and sell them to offset the gains. If you have more losses than gains, you might be able to deduct the difference, up to $3,000 per year.

Tax Partner Charlie Heid contributed this blog. He joined Gilmore Jasion Mahler in 2002 and brings decades of experience to his clients. Charlie serves individuals as well as business clients across many industries, including manufacturing & distribution, retail and construction. He shares timely information on tax and money issues monthly on WTOL's Your Day.

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 outsourced accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities