SALT LAKE CITY (ABC4 News) – The clock is ticking to file your 2018 tax return, and federal tax law changes could have a significant impact on the tax returns of Utah families, according to experts.
Tax data analyst Christopher Collard with Utah Foundation says Utahns filing may find state taxes are higher this year if they have more children; charitable giving may also not be as beneficial, from a tax perspective, as it was last year.
That’s because changes in tax law did away with personal exemptions and reduced the benefit of itemized deductions, such as charitable donations – including tithing paid by members of the Church of Jesus Christ of Latter-day Saints, the state’s largest religion.
Collard said that means fewer people this year will itemize.
“In many cases, it now makes more sense for people just to take the standard deduction,” said Collard.
Collard also said with Utah’s unique demographics of large families, the population in the state will be affected by the new tax law. Filers may see more of a federal return because the standard deduction was doubled from $12,000 for singles and $24,000 for married couples filing jointly.
Still, state returns may be lower for large Utah families because of higher taxable income – a direct result of the federal changes. Also, Utah’s recent .05 percent tax cut won’t make much of a difference for large families, Collard said. They likely will pay higher taxes.
“Generally those people with two children had kind of a wash. If you had fewer than two children you’d see kind of an additional tax credit and if you had more than two children, you would end up paying more because you had a smaller tax credit,” Collard told ABC4 News.
Changes in the tax law also mean many families claiming more withholdings on their W-4 forms saw more per paycheck during the year but will see less of a tax refund.
“You might want to go back and adjust your withholdings so you don’t get that surprise,” Collard said.
Collard also suggested filers get in touch with their local legislators to urge them to take action and reduce the state income tax rate.