Tax experts help explain changes in new law

Every taxpayer is affected in some way by the tax law overhaul enacted in late 2017. (AP photo)

Tax preparation is rarely easy, but this filing season comes with a unique set of complications.

It’s the first year people are filing under the massive overhaul to tax law put in place by Congress in late 2017. Tax season also kicked off days after a partial government shutdown. Still, some taxpayers are feeling a bit confused.

The Associated Press enlisted executives from some of the biggest tax preparers to answer questions about this tax season.

Questions were answered by Kathy Pickering, executive director of The Tax Institute at H&R Block; Mark Steber, chief tax officer at Jackson Hewitt; and David Williams, chief tax officer at TurboTax maker Intuit.

Q. What is the biggest change Americans should expect this tax season?

Kathy Pickering

A. The tax overhaul is the biggest change to the tax code in 30 years, but how it exactly impacts each person depends entirely on their specific circumstances, Pickering said.

Despite the changes, the tax filing experience will feel familiar, Pickering said. For example, taxpayers will still need to gather tax and financial documents, calculate whether to itemize or take the standard deduction, determine eligibility for deductions and credits and prepare their returns, he said.

Every taxpayer is impacted in some way, Steber said.

One of the biggest changes is that there are no more personal or dependent exemptions, Steber said. That means the exemption you could previously deduct for yourself and each of your dependents is gone, although dependents will still play a big role in other ways.

Another change is the increase in the standard deduction — it has roughly doubled. People who used to itemize may find it’s now advantageous to take the standard deduction instead. TurboTax estimates nearly 90 percent of taxpayers will take the higher standard deduction, up from 70 percent last year.

Some taxpayers might notice an unexpected change if they didn’t update their tax withholding status last year after the IRS released new withholding tables.

“It’s important to look at the total tax picture,” Williams said. “Five of seven tax rates have been lowered, and because the new law reduces tax rates, many people are expecting to see more money in their pockets. While it’s true that many may see an increase, it’s important to remember that it may have come in the form of bigger paychecks in 2018 instead of a larger tax refund in the spring. It may also come in the form of a lower balance due,” Williams said.

Q. Are people prepared?

A. “People are no less prepared this year than in the past,” Steber said.

Some taxpayers may be surprised if their refund shrinks or they owe money. But that means they likely got more in their paycheck all year long, he points out.

So while most people will come out ahead overall, it won’t feel that way for the people who got a smaller refund or owe, Pickering said.

“It’s important to remember that tax laws change every year,” Williams said. “This is nothing new for us (as a company). Taxpayers don’t need to know the tax laws — we have them covered.”

Q. Who will see the most change in their tax filing experience?

A. Pickering said those most at risk of decreased refunds or owing for 2018 are consumers who itemize and have no dependents, homeowners in high-tax states, and employees with unreimbursed business expenses.

Taxpayers with dependents will see an increase in credits this year due to changes to the child tax credits, Steber points out. Those who qualify for the earned income tax credit will also see a slight increase in refunds.

The majority of taxpayers who usually take the standard deduction may see more money in their pocket, but again this does not necessarily mean it will show up in their refund, said Williams. It could have shown up in their paycheck last year or as a lower tax balance due.

Q. Is it ever worth it to itemize?

A. Yes. All the experts agree you should still run through the calculations to find out if it’s better to itemize or take the standard deduction.

Although people are less likely to itemize, there are still plenty of deductions out there for those that do, Pickering said. You can deduct mortgage interest on up to two homes, charitable donations, medical expenses that exceed 7.5 percent of adjusted gross income and up to $10,000 in personal property tax, real estate tax, and state and local income or sales tax, among other things.

“Even if the individual expenses are small, adding them all up can make a difference to the taxpayer’s bottom line and be well worthwhile,” Pickering said.

Q. How will changes at the federal level impact state taxes?

A. “People don’t see the ripple down or domino effects to the states,” Pickering said. “Each state has to figure out what the impact of tax reform is on their filing process.”

States with an income tax had to decide if they were going to follow the IRS or not. Many states follow federal returns and have tax laws that mimic the IRS. Either way, many states did a lot of work to prepare for this coming tax season, Steber said.

Taxpayers who use a tax professional or tax preparation software don’t really have to worry as those state-level changes and calculations will be done for you.

Q. What question has come up most often so far this season?

People want to know how tax reform is impacting them, why their refunds changed, and whether to expect delays receiving their refunds, Pickering said.

The IRS has committed to timely returns. But it’s required to hold refunds for returns claiming the earned income tax credit and additional child tax credit until mid-February. Approximately 30 million taxpayers claim the earned income tax credit or the additional child tax credit, with half filing early, which means as many as 15 million taxpayers could have their refunds delayed until then.

Williams said TurboTax is hearing questions about what popular deductions and credits have changed and what can still be claimed. He reiterated that although some tax deductions went away with the passage of the new tax law, there are still tax deductions and credits you can claim to maximize your tax refund.

Q. How has the shutdown impacted things?

A. The IRS has a large backlog of paper that it needs to process, so this is not the year to file on paper if you can possibly avoid it. The IRS’ service level is lower this year, too, so contacting it for questions will require patience, Pickering said. If you have tax questions or need help filing your return, this would be a good year to get help.

The IRS encourages all taxpayers to file as soon as possible. Combined with e-filing, direct deposit is the fastest way to get your tax refund. The IRS anticipates issuing more than nine out of 10 federal tax refunds within 21 days from acceptance.

Q. Anything else people should know?

A. Don’t wait to file. And if you don’t like the outcome this year, make sure to avoid a repeat by updating your withholding with your employer.

Taxed and confused? Here’s where to get help …


The IRS has answers to most tax questions online. Its website also has a number of tools to help you find what you need, including an interactive tax assistant, searchable tax topic lists and frequently asked questions. The agency urges people to look online at for answers before calling, because telephone wait times can be lengthy.

Tax Professional

If you want, talk to a paid tax professional.

Various people can prepare your taxes, including certified public accountants, enrolled agents and attorneys. While anyone with a preparer tax identification number can prepare a return, the IRS points out that tax preparers have differing levels of skill, education and expertise.

Enrolled agents, attorneys and CPAs can represent their clients on any matter with the IRS, including audits, appeals and payment or collection issues. Other kinds of tax preparers have limited practice rights; that means they can represent clients whose returns they prepared and signed, but only before certain IRS employees. They cannot represent clients on appeals or collection issues even if they prepared the return.

The IRS has an online directory to help you search for qualified professionals in your area.

Tax Software

Many people use tax software to complete their taxes. These software programs typically have built-in or add-on services of their own to offer assistance. TurboTax, for one, offers TurboTax Live, which provides rapid access to CPAs, enrolled agents and tax attorneys to help answer questions and make sure taxes are done right.


The Volunteer Income Tax Assistance program offers free tax help to moderate and low-income individuals, and to people with disabilities or taxpayers with limited English skills who need extra assistance. IRS-certified volunteers provide free basic help. To find a location near you, use the tool found through the IRS website or call 800-906-9887.


The Tax Counseling for the Elderly program focuses on taxpayers 60 or older. Its IRS-certified volunteers can answer questions about pensions, retirement and other issues unique to seniors, according to the IRS.

The AARP Foundation’s Tax-Aid program runs the majority of the TCE sites nationwide. Locations can be found on the IRS or AARP websites or by calling 800-906-9887 or 888-227-7669.

Low-Income Taxpayer Clinics

Low Income Taxpayer Clinics provide education and resolve disputes for low-income individuals. These clinics are independent of the IRS. Each clinic decides if you meet income guidelines and other criteria before it agrees to represent you.


MilTax is the tax service provided by Military One, an organization that coordinates with the Department of Defense to provide free resources for veterans and their immediate family up to a year after retirement or separation from the military.

MilTax’s online software allows eligible individuals to file their federal taxes and up to three state returns for free. It also provides tax consultants by phone to answer questions about deployment, multistate filing, combat pay and other pertinent issues.

It is available online at or by phone at 800-342-9647.

Taxpayer Assistance Centers

Taxpayer assistance centers are IRS-run locations that are available to help people who need face-to-face help. Once known informally as walk-in clinics, you now need an appointment to visit. The number of these centers has shrunk in recent years.

Taxpayer Advocate Service

The Taxpayer Advocate Service helps people resolve problems with the IRS and recommends ways to prevent problems.

It’s not designed to provide direct help for individuals in completing their taxes, but it does have a bevy of information online to assist taxpayers. It also wants to hear from people who are experiencing economic hardship or find the IRS is not responding to them in a timely fashion and need help. While it’s an arm of the IRS, it’s intended to be taxpayers’ voice in the system.