The one time when size truly matters is when you are expecting your federal income tax refund. Unfortunately for many across the US, their refunds are going to be on average down 8.4% since last year, dropping from around $2,000 last year to $1,865 this year.
But what about Trump’s Tax Cuts and Jobs Act of 2017? Shouldn’t this have increased my return? The answer is yes, and also no. According to Andrew Kabatchnick, CPA, you may be receiving a lower refund check however the amount of taxes you paid during the year will be lower, which is ultimately more important. “If you weren’t prepared for this, and you live paycheck to paycheck like a lot of people do, this could really hurt,” explains Andrew. Refunds are lower because paycheck withholdings were lower throughout the year, which means that taxpayers were able to keep more of their paycheck over the course of 2018. Those upset with the lower refunds are missing the bigger picture.
Overall your refund check might be less than previous years but your overall tax burden is also smaller.
Questions, concerns, or comments? Reach out to Andrew, a CPA and most trusted tax and financial adviser. With offices in NYC, White Plains, and Morris County, NJ, he is available across the tri-state area and can be reached via email at firstname.lastname@example.org or by phone at 973-879-9111.