As promised, cuts in government income tax have boosted the net pay of many people this year. But the disadvantage is that tax returns announce smaller ones.
How much smaller?
On average, yields are lower by about 8.4% this year. Specifically, the average tax refund this year is $ 1,865, or $ 170 less than the $ 2,035 average from last year, according to IRS figures. The IRS data compared the cumulative statistics of February 2, 2018 and February 1, 2019, according to published reports.
"While some people have probably noticed an increase in their net pay, the amount might have been small enough to not have noticed, especially those who benefit from direct deposit and who might not look at their heel. check, "explained NBC News.
The increase may have gone completely unnoticed for workers having benefited from an increase in their health insurance or another deduction on their salary.
This is explained in particular by the adjustments made to the tax deduction tables under the law on tax cuts and employment adopted in 2017. This is the first year that the amendments come into force.
Some people might even end up having to owe money.
"There will be a lot of people unhappy over the next month," Edward Karl, vice-president of taxation at the American Institute of CPA, told Politico. "Taxpayers want a big refund."
To date, the IRS has received 12.4% fewer personal income tax returns than at the same time last year, according to published reports. In total, tax refunds of $ 8.713 billion were paid this year to 4,672,000 taxpayers. At the same time last year, 6,171,000 taxpayers received $ 12.560 billion in returns.
What can be done?
To avoid any surprises, it is best to check the amount of your withholding – the income tax withheld by your employer and sent to the IRS. A key moment to verify this amount is when big adjustments are made to tax laws, according to the IRS.
The Government Accountability Office reported in August 2018 that about 30 million people (or 21% of taxpayers) did not have sufficient tax withholding.
"Just over two in ten taxpayers will need money at the IRS next year," CNBC said.
In addition, about 5 million people who received a refund last year will not get it this year.
"It's a problem if taxpayers do not understand that they have received this extra money via larger paychecks during the year," said George W. Detroit Press. Smith IV, Chartered Accountant. "We have made every effort to educate our customers about this during the year."