This past tax season, many taxpayers were surprised with worse-than-expected results (smaller refunds, or bigger balances due to the IRS). This was an especially unwelcome surprise because due to the Tax Cut and Jobs Act of 2017, many were expecting to receive more money back. What happened?
It’s important to remember that there are two elements that make up your refund: the amount of your taxes, and the amount that you sent to the IRS during the year (usually through withholding). If the amount of your taxes is lower than the amount that you had withheld, you get a refund. If it was higher, then you owe them money. For most taxpayers, their taxes did go down, but in many cases their withholding went down even more. This was a shock to many three months ago when they filed.
Did your taxes go down or did they go up? Ultimately the best way to determine that is to compare your 2017 and 2018 returns. Contact me today and I’m happy to take a free look at your return to determine what happened.