Consumer Alert: Tax reform could impact your refund

Posted: Updated:
EDISON -

Could the new tax reform law impact your 2018 tax return?

New numbers show that the average tax refund so far stands at $3,143, up $40 from last year. But the size of your refund is just a small part of the tax reform law.

“During the year, the withholding tables were adjusted,” says accountant Joe Petrocelli.

Petrocelli says that the new law did more than change tax rates, it also meant less money was taken out of each paycheck. The less taxes someone pays throughout the year, the less they would get back in their refund, which isn’t necessarily a bad thing.

 

“As soon as you have a dollar, you can spend it. It may help you with that extra needed expense you incur,” Petrocelli says.

But financial experts say people here in the tristate area are more likely to actually get hit with higher taxes this year.

“Some colleagues of mine kind of did an analysis by state. And actually, New Jersey turned out to be the state with the highest percentage of people who would be a net loser under this bill. I believe it would be one in 10,” says Joseph Rosenberg with the Tax Policy Center.

One reason for this is the cost of real estate. The new law caps the property tax deduction at $10,000. This is more than enough in most states, but not necessarily around the tristate.

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