Why You May Have A Smaller Tax Refund This Year And How To Fix It For 2019

February 25, 2019

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Tax filings have begun with some people getting a surprise that their once tax refund is smaller than before and in some cases, taxes are owed.  But how can this happen when tax laws were changed to keep more money in your pocket?  Most likely is your withholding level (the amount of tax you chose to have taken out of your paycheck in 2018). When the Tax Cuts and Jobs Act took effect last year, most Americans didn’t take the IRS’ advice and make sure their employer was adjusting their withholding correctly. If at least one member of your household gets a paycheck, make sure the employer withholds enough in federal tax each pay period. The IRS offers a free withholding calculator to help you determine how much money should be withheld from your paycheck. The calculator will tell you how many personal allowances to enter on your W-4 withholding form. To use the tool, you’ll need information from your 2018 tax return, plus recent pay stubs. Keep in mind that the IRS says its Withholding Calculator is mainly useful for households with two working spouses, two or more jobs, or nonwage income, such as cash tips.

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SOURCE: Consumer Reports

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