Have you just completed your taxes and were surprised by your lower-than-normal IRS tax refund? You’re not alone. Many Americans this year are receiving smaller-than-usual tax refunds without a clue why. President Trump signed the Tax Cuts and Jobs Act last year, which affected just about every American’s taxes.
Due to the historic government shutdown, IRS tax refunds will be delayed as government employees scramble to catch up with their work.
IRS Tax Refund Confusion Uncovered
Kevin Brady, a representative who supported the new tax overhaul from the state of Texas told CNBC that tax refunds are smaller this year because less money was taken out in taxes throughout the whole year. Most people didn’t fine tune their W4s after the new tax law went into place and that’s why there is so much confusion.
“The people who are most likely to be surprised this year are the ones who lost some deductions they had last year and who didn’t make changes to their withholding,” said Nathan Rigney, lead tax research analyst at the Tax Institute at H&R Block.
Families with children will most likely see the largest IRS refund, as each child under 17 can now be deducted up to $2,000. In previous years, this was $1,000. Also, the new tax act has a non-refundable $500 credit for other qualifying dependants that don’t meet the requirements for the larger child tax credit.
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Those who didn’t change or itemize their W4s and don’t have any children will likely see a smaller refund than the previous year. While there were fewer taxes taken out during the whole year, many people are still furious with their smaller-than-expected IRS tax refund. Especially since most human resource departments don’t guide their employees on deductions.
If you are one of these disappointed people, it’s best to get educated on deductions and see what works best for your household. There are many different ways to process withholdings and each person needs to decide what they prefer.
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