Why my tax refund is too low this year

Author: H & S Accounting | | Categories: Accounting , Financial Statements , Payroll Processing Services , Tax Credits , Tax Planning , Tax Return , Tax Saving Ideas

The 2018 is the first tax filing year under the new Tax Cuts and Jobs Act (TCJA). It took effect on January 1, 2018.  Tax rates generally are reduced for most taxpayers under this new tax law, but some of the tax filers may notice smaller or no refunds on their tax returns.

This is because the IRS created new withholding tables, which guided employers on how much money to withhold from employees' paycheck. The withholding amount went down for most people, so they received more on their paychecks in 2018. 

An income tax refund is given when a tax payer pays more than they owe in taxes during the year. Under the new tax withholding tables, people received a bigger paycheck throughout the year and paid very close to the amount they actually owed to the government. So, IRS do not owe tax payers as much in refunds, and people are receiving smaller refunds. 

There could be many other reasons that your income tax refund is different this year than in previous years i.e. Your income is not the same as previous years. It increased or decreased.  

However, a change in your tax rate, payments, deductions, income and withholding can cause a difference in your income tax refund.