before splurging on holiday gifts this year, and ask
yourself if you’re going to get a far bigger tax bill
than you expect next year.
Or if you
get a tax refund, is it likely to be smaller? Millions
of Americans won’t get their usual tax refunds next
about your taxes now is essential, particularly since we
started receiving more money in our paychecks in
February because of changes in the payroll withholding
tables under the new federal tax law.
Jones, H&R Block president and CEO, said consumers
often first start thinking about their taxes when they
receive their W-2 forms early in the year. But he said
tax talk is bubbling up now, given the political
discussions during the midterm elections.
leaders are talking up the possibility of passing a 10
percent middle-class tax cut next year. President Donald
Trump and Kevin Brady, R-Texas, chairman of the House
Ways and Means Committee, Wednesday there was no chance
of pushing through a middle-class tax cut in Congress
continue to wonder how the new tax rules, passed in
December 2017, will affect the tax returns they file
know they’re confused about what it actually means,”
Jones said last week. “This is a topic that creates
past year, we’ve repeatedly advised taxpayers to take
time to re-evaluate their paycheck withholding. Seeing a
bigger paycheck now could mean that you’re going to
see a small refund — or even taxes due — on your
2018 return next year.
adjust, you can have more money withheld by tinkering
with a W-4.
know that not enough consumers have changed their
W-4,” Jones said.
estimated, he said, that about half of H&R Block
clients who receive a refund will have bigger refunds
and half will have smaller refunds.
the Government Accountability Office issued a report
that noted that the Internal Revenue Service warned
taxpayers to take a look at the paycheck withholding
calculator that the IRS has online.
said checking your withholding can help protect against
having too little tax withheld and facing an unexpected
tax bill or penalty at tax time next year.
average tax refund was $2,825 in 2018, up $9 from 2017,
based on IRS data.
million Americans — or 21 percent of taxpayers — are
not withholding enough to cover the taxes dues,
according to a simulation listed in the GAO report.
That’s up from 18 percent if the tax laws had not
percent of taxpayers with wages are having too much
taxes withheld and would receive a refund, based on
simulations run by the Treasury Department. That’s
down from 76 percent if the tax laws had not changed.
taxpayers may be especially vulnerable to having too
little withheld, given the changes in tax breaks and
rules. They include two-income families; families with
older dependents, including children 17 or older; and
taxpayers who itemized deductions in 2017.
with high incomes, homeowners who live in high-property
tax states and those with complex tax returns are urged
to take a second look at their withholding amounts, too.
it’s late in the year, it may still be possible to
have more money withheld from your paycheck if you’re
concerned that your refund will be smaller or you’d
owe more money than in the past.
consumers might be willing to take the money now and
settle for a smaller refund or a tax bill next year. But
others might depend on a bigger refund.
want it in your paycheck? Or do you want it in your
refund?” Jones said.
aren’t just centered on how the next tax changes will
impact taxpayers. Wall Street analysts are wondering if
tax simplification will take a bite out of H&R Block
and others, too. Fewer taxpayers are expected to
itemize, for example, under the Tax Cut and Jobs Act of