Most Americans don't understand the tax code: Survey
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Tax season officially began on Monday, and a significant change to the U.S. tax code is causing more stress than usual among taxpayers this year.
According to a new survey from online tax preparation company TaxSlayer, 57% of Americans are not confident about their understanding of the tax code. The survey was taken before the new law was finalized, but while alterations were in progress on Capitol Hill.
The new law changes a lot about the way payers file, from eliminating exemptions and deductions for individuals to substantially increasing the standard deduction. Therefore, it may be more difficult than usual for taxpayers to navigate their finances this year, Mark Kohler, a certified public accountant and senior tax advisor at TaxSlayer, told FOX Business.
“Now that we have final rules and a clear path for planning, it’s more important than ever for people to use a service that can help guide them through the process,” Kohler advised. “For those wanting to prep their own taxes, it can be challenging and it’s critical to find a tax preparation software you trust.”
Consulting an expert or service could help quell some other concerns, considering 49% of taxpayers feel that they are paying too much in taxes, while just 36% thought they were paying the right amount. As previously reported by FOX Business, the new law could complicate matters even further, as many Americans will see inadequate amounts withheld from their updated paychecks. If you don’t want a big bill from the IRS come April, it is important to check to make sure you’re being taxed at the correct rate and, by the end of next month, the IRS will roll out a calculator to help taxpayers do so.
Even though many individuals will experience a tax break under the GOP’s new law, 31% of people thought they would be harmed by the new bill, pointing to the need for individuals to educate themselves about the changes, Kohler said.
While the first day to file for the year is upon us, most Americans won’t be filing this month. According to TaxSlayer, the largest percentage of people, 35%, generally file in February.
But the sooner, the better, according to Kohler.
“The earlier you start, the more time you have to double check and make sure you’ve utilized all available deductions and maximized your refund,” he said.