Tax code changes leave Americans asking, 'What happened to my refund?'

[FreeinChrist]

Tax code changes leave Americans asking, ‘What happened to my refund?’

With filing season officially under way, a growing number of taxpayers are realizing that the Tax Cuts and Jobs Act might be a double-edged sword.

The White House said in October 2017 that the average family “would get a $4,000 raise” when it was pushing for passage of the law. Now that the new filing season has begun, some taxpayers are finding out that the tax man giveth — but also taketh away, especially as it pertains to their annual refund......

Facebook user Erin Boyd told of a similar unpleasant surprise in a comment on the social media platform. “I got screwed. Widow with two young children and I try to owe $100 or less, because who likes loaning money to the government. And this year I owe $1,000,” she said.

A top culprit for the confusion is the fact that the IRS made changes to withholding tables about a year ago. “People have fewer withholdings in most cases than they did last year, and they don’t realize it,” said Bob Charron, partner and head of the tax department at Friedman LLP.​

 

[LoAmmi]

Yeah, it looks like the IRS withholding problem is the culprit. But I doubt many of the people affected will be able to recognize that's the problem. They also don't realize that when you get a tax return, that's really just an interest-free loan you gave the government.

 

[FreeinChrist]

The GOP's tax cut just keeps getting worse

The 2017 law was supposed to boost workers' wages, create jobs, and drive more investment — and as we've known for awhile, it's done none of that. But now we can add two more failures to the creatively-named Tax Cuts and Jobs Act (TCJA): It hasn't encouraged corporations to return their profits from overseas, and it's probably hiding a nasty surprise for many Americans come tax season.....

Tax day isn't until April, but the average refund is already down more than 8 percent compared to last year. Anecdotal evidence is also rolling in that people who expected refunds are getting hit with extra tax bills instead. An intrepid Twitter user even compiled a collection of Trump supporters doing their taxes and discovering, to their horror, that their year-end tax bill went up.

At a minimum, the agencies were given a pressing logistical task they had too little time or resources to handle. But David Dayen also pointed to evidence the Trump administration actively pressured Treasury and the IRS to undershoot withholding estimates. In January 2018, Politicoreported that the IRS was "under pressure to take as little as possible so people will see big increases in their take-home pay," and annoyed Democratic senators were looking into the matter. The Congressional Budget Office also expects withholding to be unusually low this year.

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[FreeinChrist]

Some are having to pay when they expect a return. A lady who lives where my mom does and lives on Social Security and a pension is going to have to pay over $1000 when she usually gets a refund.
Nothing changed but the codes tied to that law.

 

[HTacianas]

Tax code changes leave Americans asking, ‘What happened to my refund?’

With filing season officially under way, a growing number of taxpayers are realizing that the Tax Cuts and Jobs Act might be a double-edged sword.

The White House said in October 2017 that the average family “would get a $4,000 raise” when it was pushing for passage of the law. Now that the new filing season has begun, some taxpayers are finding out that the tax man giveth — but also taketh away, especially as it pertains to their annual refund......

Facebook user Erin Boyd told of a similar unpleasant surprise in a comment on the social media platform. “I got screwed. Widow with two young children and I try to owe $100 or less, because who likes loaning money to the government. And this year I owe $1,000,” she said.

A top culprit for the confusion is the fact that the IRS made changes to withholding tables about a year ago. “People have fewer withholdings in most cases than they did last year, and they don’t realize it,” said Bob Charron, partner and head of the tax department at Friedman LLP.​

My refund was 2000 dollars more than the last five years.

 

[LoAmmi]

Some are having to pay when they expect a return. A lady who lives where my mom does and lives on Social Security and a pension is going to have to pay over $1000 when she usually gets a refund.
Nothing changed but the codes tied to that law.

The withholding is the problem. There's a good chance that if the person looks at what they actually owe compared to last year, they are paying a bit less. But because the stable genius wanted people to think they were getting more in take-home pay and pressured the IRS to change withholdings, people are now having to pay to make up the difference.

 

[LoAmmi]

My refund was 2000 dollars more than the last five years.

I ended up needing to pay 3000.

 

[A Realist]

Yup. People didn't realize that just because they withhold less from your paycheck, it didn't mean they weren't gonna want it back at the end of the year.

 

[RDKirk]

Yeah, it looks like the IRS withholding problem is the culprit. But I doubt many of the people affected will be able to recognize that's the problem. They also don't realize that when you get a tax return, that's really just an interest-free loan you gave the government.

I have not been able to balance that since about 1988. Up until then, the W-4 withholding calculator kept my refund to around $25.

The IRS changed the calculator in some way in 1988, and I haven't been able to use it to avoid massive amounts owed since then. I usually have to declare as single and then add several hundred dollars per month to avoid owing money.

 

[Hank77]

I have not been able to balance that since about 1988. Up until then, the W-4 withholding calculator kept my refund to around $25.

The IRS changed the calculator in some way in 1988, and I haven't been able to use it to avoid massive amounts owed since then. I usually have to declare as single and then add several hundred dollars per month to avoid owing money.

We always claimed zero allowances on our W-4s and never had to pay in. We haven't done ours yet this year.