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A Kiplinger-Barclays poll shows that most Americans aren't feeling a financial boost from the tax overhaul.  A majority of Americans surveyed in a new poll conducted by Kiplinger in partnership with Barclays Bank say their taxes stayed about the same after the 2017 Tax Cuts and Jobs Act, with remaining respondents almost equally split between higher and lower taxes. SEE ALSO: 20 IRS Audit Red Flags The tax overhaul lowered tax rates and expanded income thresholds, but employers also reduced withholding for many wage earners. That may have reduced refunds or inflated balances due with the returns of many taxpayers—and given the impression that savings under the new law were less generous. In addition, the law scaled back itemized deductions. Some 15% of respondents report being affected by the new $10,000 cap on deducting state and local taxes. Some 20% said they felt the impact of no longer being able to claim miscellaneous itemized deductions to write off items such as tax preparation and investment fees and unreimbursed business expenses. Other highlights: Nearly 40% of respondents say they switched from itemizing deductions to taking the standard deduction, which increased to $12,000 for individuals and $24,000 for married couples filing jointly for the 2018 tax year (higher for taxpayers age 65 or older). Nonitemizers can’t deduct charitable contributions, and roughly 20% of respondents report reducing donations. But about two-thirds of those surveyed say they give to charity regardless of any tax break. About three-fourths of respondents got a refund on their last return. Nearly two-thirds say they’d rather get a refund than a bigger paycheck throughout the year. The poll surveyed a national sampling of 852 taxpayers between December 3 and 13, 2019. The median age was 49 years old, and the median household net worth was $203,850 (excluding a primary residence). We’ve included highlights here (figures are medians unless otherwise indicated).  Which of these tax changes affected you? I CAN NO LONGER TAKE MISCELLANEOUS ITEMIZED DEDUCTIONS: 20% I CAN’T DEDUCT STATE AND LOCAL TAXES THAT EXCEED $10,000: 15% I CAN ONLY DEDUCT INTEREST ON A MORTGAGE OF UP TO $750,000 (DOWN FROM $1 MILLION): 8% NOW I CAN ONLY DEDUCT CASUALTY LOSSES IF THEY OCCURRED IN A FEDERALLY DECLARED DISASTER AREA: 7% I CAN NO LONGER DEDUCT MOVING EXPENSES WHEN RELOCATING FOR A JOB: 4% I CAN NO LONGER DEDUCT ALIMONY PAYMENTS: 1% NONE OF THESE 58%  Has your charitable giving changed? NO, I GIVE REGARDLESS OF ANY TAX BREAK: 66% YES, I HAVE DECREASED THE AMOUNT I DONATE TO CHARITY: 20% YES, I COMBINED TWO OR MORE YEARS OF CHARITABLE GIVING INTO A SINGLE YEAR TO QUALIFY FOR THE TAX DEDUCTION: 8% I’M OVER 70 AND NOW GIVE TO CHARITY DIRECTLY FROM MY IRA: 3% YES, I OPENED A DONOR-ADVISED FUND: 1% I CAN NO LONGER DEDUCT ALIMONY PAYMENTS: 3% Do you usually hire someone to prepare your tax return? NO: 52% YES: 48% If you prepare your own return, do you use tax software? YES: 72% NO: 28% Which tax software do you use? TURBOTAX: 75% H&R BLOCK: 17% TAX ACT: 13% OTHER: 4% Did you receive a refund after filing your last tax return? YES: 74% NO: 28% SEE ALSO: 10 Tax Breaks for the Middle Class Would your rather get a tax refund or have less tax withheld throughout the year and receive bigger paychecks? REFUND: 63% BIGGER PAYCHECK: 37% The median tax refund for 2018 was $2,154. What did you do with your refund? SAVED IT: 38% SPENT A PORTION; SAVED THE REST: 23% CREATED AN EMERGENCY FUND: 6% INVESTED IT: 10% PAID CREDIT CARD BILLS: 25% PAID STUDENT LOANS: 3% BOUGHT GIFTS FOR FRIENDS OR FAMILY: 3% BOUGHT MYSELF A GIFT: 6% SPLURGED ON A VACATION: 7% SPENT IT ON EVERYDAY ITEMS: 7% After filing your last tax return, did you make changes to your W-4 to adjust your withholding? NO, I’M FINE WITH THE WAY IT IS: 88%
YES, I HAD MORE TAXES TAKEN OUT OF MY PAYCHECK: 8% YES, I HAD FEWER TAXES WITHHELD: 4% Comments are closed.
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AuthorSal Censoprano is a Certified Public Accountant (CPA) and tax practice owner for over 40 years. He was born and raised in Brooklyn, New York and earned his master’s degree in taxation. Archives
December 2020
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