Accountant explains why you may have a smaller tax refund this year


    (AP Photo/Susan Walsh, File)

    Many Americans getting their tax refunds back are finding they’re smaller than last year.

    The average refund is down almost 9 percent.

    Accountants say this decrease was expected because of the changes in the tax law.

    Most taxpayers did receive a tax cut this year, but some may have had too little withheld on their paychecks.

    That’s resulting in a smaller-than-expected refund, or even money owed to the government.

    “What you’re seeing is people had more take-home pay," said accountant Jared Weidner. "Their checks were a little bit larger each week, but when it’s in small increments -- just a couple of dollars here and there -- you don’t really notice it add up. But when you go to file your return and that refund is lower, you sure notice it then.”

    Jared Weidner is an accountant at Weidner and Company. He says it’s important to look at the total tax you paid this year compared to last year, as opposed to comparing your refunds.

    “You may be surprised and find out you did end up making a little bit more, but paying less in taxes, and so the refund can be a bit deceiving because you think you ended up getting less when in fact you did receive more," said Weidner.

    Even so, some taxpayers like Michael Moore are not happy about how things are shaking out.

    “The tax cut didn’t work like I thought it was going to work and I’m very disappointed in it," said Moore.

    His daughter Dawn works as a dishwasher at Notre Dame’s student center.

    He says her refund this year is $180 less than it was last year.

    “It didn’t dawn on me that ‘OK, they cut the amount of withholding,’ which everybody did," said Michael Moore. "But I don’t know if people even know that and that at the end of the year you figure it out – OK so you got $347 in a tax cut because she got $6.67 a week more. Whoopie.”

    Tax refunds have become an annual chunk of money that many Americans rely on to catch up on bills, debt or go toward a big purchase.

    Now that lower refunds are expected to continue, experts say it’s important to take this into consideration when preparing your household budget.

    The U.S. Treasury Department believes about 80 percent of taxpayers will see a lower tax bill this year, while about 5 percent will owe more.

    The standard deduction increased, making itemization more difficult.

    Now, certain medical expenses and unreimbursed employee expenses can’t be claimed, meaning those taxpayers could see their bill go up.

    News In Photos

      Loading ...