BEVERLY HILLS, Calif. (FOX 11) - Millions of Americans will be surprised as they file their taxes this year. Refunds for the 2018 tax year will be less than expected, and many filers could end up owing the IRS, even if they’ve received a refund in years past.
“It sucks to be honest. I was expecting a little less, I just wasn’t expecting nine dollars,” said Chelsea Brooksher. She always takes the standard deduction and prefers to get a sizable refund.
“I would definitely rather have the $1,500 at the end of the year back rather than $9,” Brooksher said while laughing.
What’s changed? The tax code. The Tax Cuts and Jobs Act passed in December 2017 with only Republican votes is seen as President Trump’s major legislative achievement of his first year in office. The changes include limits on property and income taxes, and even how the IRS handles withholding.
“Because the withholding changed, the paycheck gets larger,” said Aaron Martinez, a Master Tax Advisor with H&R Block in Beverly Hills. “So you’re really getting your refund in each paycheck.”
Martinez says workers may not have noticed paying less in taxes throughout the year.
“You didn’t necessarily notice that your paycheck changed from a week-to-week basis. So all of a sudden, you’re going to do your taxes, and now you’re shocked,” Martinez added.
The IRS says, so far, the average tax return is down 8% compared to last year, and the number of people getting a return has dropped by about a quarter.
Martinez helped customer Thomas Cacho file his 2018 return. His refund went down about 10%, or $50 — not enough for him to care. “Single with no children ... maybe that’s why it didn’t affect me,” Cacho said as he laughed.
Martinez recommends changing your withholding elections with your employer on your W-4 for those who’d like to see a bigger refund moving forward.
But things are different for Brooksher, who says the changes hit her budget hard. “I like to use the refund to go on a vacation,” she said, “but now I don’t get that.”
Experts say you should file your taxes as soon as possible.
Any potential federal government shut down is unlikely to impact the IRS, which brought in thousands of more workers to continue processing those returns during the first shutdown.