Don't Bank on a Tax Refund This Year

The tax filing season tends to produce a familiar pattern for the majority of workers: Submit a return and wait to collect a refund. But that's not necessarily how things will roll this time around. In fact, you might actually end up owing the IRS money, even if you've historically gotten money back during tax time.

Your tax refund might've come already

The 2018 tax overhaul resulted in numerous changes to the tax code, and those included a lowering of virtually all individual tax brackets to put more money into working Americans' pockets. To accommodate those changes, the IRS released new withholding tables early last year that dictated how much tax employers held back from their workers' earnings. As a result, many workers received more money in their paychecks month after month. If you were one of them, it could be that the extra money you'd typically receive in a refund was, in fact, paid to you already -- which means you won't be getting a windfall from the IRS in April.

IMAGE SOURCE: GETTY IMAGES.

Furthermore, if you saw a substantial increase in your take-home pay, you might, under some circumstances, land in a situation where you end up owing the IRS money, even if you've historically gotten a sizable refund. For example, if you made a lot of money on investments or earned a chunk of interest in a certificate of deposit, that's income you probably didn't pay taxes on already -- which means that you might owe it to the IRS soon enough.

That's why this year, it's more important than ever to start working on your tax return well ahead of the April 15 filing deadline. If it turns out you do owe taxes, you'll have more time to come up with that money and avoid penalties.

Remember, just as you want your refund processed as quickly as possible, the IRS doesn't like to be kept waiting when it comes to getting its money back. If you don't pay your tax bill by the filing deadline, you'll face a late payment penalty equal to 0.5% per month, or partial month, that your debt remains unpaid, up to a total of 25%. Considering 40% of Americans don't have enough cash on hand to cover a $400 emergency, that's bad news for those folks who might end up on the hook tax-wise.

On the other hand, if you complete your return by mid-February and discover that you owe the IRS money, you'll have some time to scrounge it up. You might take on extra shifts at work, get a side gig, sell some belongings you can live without, or cut back on discretionary spending to make up that difference.

Many tax filers will indeed see money back from the IRS this year once they file their returns. But to be on the safe side, don't count on that happening. Instead, get moving on your upcoming return. Once you complete it, you'll see whether there's a refund coming your way, or whether you're on the hook for an unwanted tax bill.

What to Expect When Chipotle Reports After the Close

Chipotle Mexican Grill Inc. (NYSE: CMG) is scheduled to release its fourth-quarter financial results after the markets close on Wednesday. Thomson Reuters consensus estimates call for $1.34 in earnings per share (EPS) and $1.19 billion in revenue. The same period of last year reportedly had $1.34 in EPS and $1.11 billion in revenue.

At the beginning of January, Chipotle released a new collection of Lifestyle Bowls that cater to different diets that customers may have taken on the New Year. The new line includes a Paleo Salad Bowl, Keto Salad Bowl, Whole30 Salad Bowl and Double Protein Bowl, all exclusively available through the mobile app and on the Chipotle website for in-restaurant pickup or delivery.

These diet-driven menu offerings are helping those who have committed to living a healthier lifestyle by making it easy to order delicious bowls that only contain the real ingredients permitted by certain diet regimens.

For the basis of comparison: comparable restaurant sales increased 4.4% in the third quarter. At the same time, digital sales grew 48.3% in the quarter and accounted for 11.2% of sales.

Overall, Chipotle has outperformed the broad markets, with its stock up about 22% year to date. In the past 52 weeks, the stock is up about 69%.

A few analysts weighed in on Chipotle ahead of the results:

Robert Baird has an Outperform rating with a $600 price target. Wells Fargo has a Market Perform rating and a $486 price target. Piper Jaffray’s Overweight rating comes with a $590 price target. BTIG Research has a Buy rating with a $605 target price. JPMorgan has a Neutral rating and a $500 target price. Maxim has a Hold rating with a $510 price target. Telsey Advisory Group has an Outperform rating and a $500 target.

Shares of Chipotle were last seen at $523.25 on Wednesday, in a 52-week range of $247.52 to $543.90. The consensus analyst price target is $489.16.

ALSO READ: RBC Global Energy Best Ideas Up Big in 2019: 4 to Buy Now

Small-business owners look to grab this 20 percent tax break

Small-business owners filing their 2018 taxes may be able to take advantage of a brand-new 20 percent tax break.

One of the new features of the Tax Cuts and Jobs Act is the introduction of the qualified business income deduction, which went into effect last year.

This tax break allows owners of "pass-through" entities, including sole proprietorships, S-corporations and partnerships, to deduct up to 20 percent of their qualified business income.

Don't get too excited just yet. Business owners and their accountants have been grappling with the deduction for most of 2018, trying to figure out who qualifies.

"The well-advised client will view this as another data point to reevaluate their structure and business. But I always tell them that while tax is an important aspect of business decisions, it's only an aspect." -Jonah Gruda, CPA and partner at Mazars USA

Adding to the uncertainty, the IRS also spent most of last year and part of January 2019 fine-tuning the regulation and more closely defining which industries could nab the deduction.

"I think overall, the IRS did a great job of clarifying things, but there are still open and unanswered questions that I think need to be addressed further through other guidance," said Jeffrey Levine, CPA and CEO of Blueprint Wealth Alliance in Garden City, New York.

"I think this is something we'll be dealing with for years and years," he said.

Here's what you should know.

Do you qualify? Alistair Berg | DigitalVision | Getty Images

The IRS has built in some limits in order to keep the qualified business income deduction from being a free-for-all.

First, entrepreneurs, regardless of industry, may take the 20 percent deduction if they have taxable income that's under $157,500 if single or $315,000 if they're married.

Over that income threshold, the IRS places limits on who may take the break.

show chapters Here are your income tax changes for 2019    11:35 AM ET Wed, 9 Jan 2019 | 01:05

For instance, "specified service trades or businesses," including doctors, lawyers and accountants, aren't able to take the deduction at all if their taxable income exceeds $207,500 if single or $415,000 if married.

The rules are different for businesses that aren't "specified service trades or businesses."

Those business owners get a reduced deduction if their taxable income exceeds the $157,500/$315,000 threshold and is still under the $207,500/$415,000 threshold.

If your company is not a "specified service trade or business" and your taxable income is over the $207,500/$415,000 threshold, your deduction is generally capped as a percentage of W-2 wages paid to your employess.

A break for landlords Drew Angerer | Getty Images A sign advertises an apartment for rent along a row of brownstone townhouses in Brooklyn, New York.

In January 2019, the IRS proposed additional guidance for rental real estate owners, a safe harbor they can follow in order to be certain they qualify for the 20 percent deduction.

Those guidelines include maintaining separate books and records for each rental enterprise, as well as performing and documenting at least 250 hours of rental services in a year.

Those servicesmay include time spent collecting rent, maintaining the property and supervising employees and independent contractors.

However, other activities are excluded, including traveling to the property and studying financial statements.

show chapters Ready, set, file    12:28 PM ET Mon, 28 Jan 2019 | 02:42

Accountants say that the 250-hour hurdle is onerous.

"When you hire someone to cut the grass, you do just that," said Troy Lewis, CPA, associate teaching professor at Brigham Young University and chairman of the qualified business income task force at the American Institute of CPAs.

"You don't say, 'Cut the grass and tell me how many hours it takes you to do it,'" he said.

If you're a landlord who's hoping to nab the 20 percent deduction under the safe harbor, be sure you have all of your invoices from 2018 to back up the number of hours spent servicing your property, Lewis said.

Your vacation home Steve Shepard | iStock / 360 | Getty Images

A rental property that you also use personally isn't eligible for the safe harbor, which could make things uncertain for people who lease out basements or vacation homes.

"If you live there part of the time in the same space, then it's a challenge," said Lewis at Brigham Young University.

Even renting out your beach cottage to summer visitors won't guarantee that you qualify for the safe harbor.

"Let's say I rent out a condo in Boca Raton, but I never go there," said Lewis. "That's OK, but the problem is I won't meet the 250 hours of rental service."

"There are gray areas where it's a matter of your tax risk tolerance. Are you a fighter, or are you going to say, 'I have bigger things to worry about.'" -Jeffrey Levine, CPA and CEO at Blueprint Wealth Alliance

Triple net leases — arrangements in which the tenant agrees to foot the bill for real estate taxes, insurance and maintenance — are also excluded from the safe harbor.

Failing to qualify doesn't preclude you from trying to claim the deduction on your 2018 tax return, but it does mean you have to be ready for the IRS to push back.

"Remember that just because you don't meet the definition, doesn't mean you won't be considered a business for the purpose of the deduction," said Levine of Blueprint Wealth Alliance. "But the onus is on you."

How to proceed Doug Berry | E+ | Getty Images

As tempting as the 20 percent deduction is for small businesses, entrepreneurs should proceed with caution and be ready for the possibility that the IRS could challenge your deduction. Here's how to proceed:

• Keep well-documented books and records. Be sure to closely review the receipts and statements that pertain to your business, and prepare to turn these in to your accountant.

If you're hoping to claim the deduction for a property you rent out and do so under the safe harbor, the IRS will want to know how much time you spent on maintenance, management and more.

• Think before making dramatic changes to your business. Last summer, the IRS put the kibosh on aggressive strategies accountants pitched to help entrepreneurs qualify for the break.

The qualified business income deduction is still a work in progress — and it's only around until the end of 2025 — so slow down before doing anything too drastic.

"The well-advised client will view this as another data point to reevaluate their structure and business," said Jonah Gruda, CPA and partner at Mazars USA. "But I always tell them that while tax is an important aspect of business decisions, it's only an aspect."

• Talk to your accountant. Do a gut check of your appetite for the deduction, and prepare for the possibility that you may have to make your case to the IRS.

"There are gray areas where it's a matter of your tax risk tolerance," said Levine of Blueprint Wealth Alliance. "Are you a fighter, or are you going to say, 'I have bigger things to worry about'?

"I have clients in both camps," he said.

More from Personal Finance
Taking a loan from your 401(k) does come with risks
Ready, set, file: What you need to file your 2018 taxes
These red flags on your 2018 tax return could spark interest from the IRS

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SPDR Gold Shares (GLD) Short Interest Update

SPDR Gold Shares (NYSEARCA:GLD) was the recipient of a significant increase in short interest in the month of January. As of January 15th, there was short interest totalling 16,614,266 shares, an increase of 25.9% from the December 31st total of 13,191,386 shares. Based on an average daily trading volume, of 9,650,888 shares, the short-interest ratio is currently 1.7 days.

Several institutional investors have recently made changes to their positions in GLD. Renaissance Technologies LLC purchased a new position in shares of SPDR Gold Shares during the second quarter valued at $463,000. CENTRAL TRUST Co increased its stake in shares of SPDR Gold Shares by 2.1% during the third quarter. CENTRAL TRUST Co now owns 103,832 shares of the exchange traded fund’s stock valued at $11,709,000 after buying an additional 2,177 shares during the period. Chemung Canal Trust Co. purchased a new position in shares of SPDR Gold Shares during the third quarter valued at $226,000. Investment House LLC purchased a new position in shares of SPDR Gold Shares during the third quarter valued at $250,000. Finally, We Are One Seven LLC purchased a new position in shares of SPDR Gold Shares during the third quarter valued at $276,000.

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Shares of SPDR Gold Shares stock opened at $124.50 on Friday. SPDR Gold Shares has a 12 month low of $111.06 and a 12 month high of $129.47.

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About SPDR Gold Shares

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