Accountants warn tax reform could add up to April shock

The following article by Jim Spencer was posted on the Star Tribune website September 1, 2018:

Those who rely heavily on deductions could see a bill.

Every summer, Mike McClure looks at his income tax withholding. The Apple Valley man doesn’t want to give the government what he calls a “free loan” by having too much money withheld from his paycheck. He also doesn’t want to end up owing a bunch to the IRS when he files his taxes in April.

In the past, McClure’s system has led to little more than minor tweaks. This year, under the new federal tax law, he will owe the federal government $6,800 in April if he doesn’t radically alter his withholding for the remainder of the 2018 tax year.

“This whole tax-cut thing was sold to middle-class Americans as ‘we’re all going to get a tax cut,’ ” McClure said. “This wasn’t what I expected.”

View the complete post here.

REMINDER:  Rep. Erik Paulsen voted FOR this bill, which provides a large, permanent tax cut for corporation and a moderate one that expires for his constituents.  Most of that cut will be impacted by the other changes in the bill including a decrease in the allowed amount of property tax that can be deducted from personal taxes.