Why is my refund smaller, or why do I owe money this year?
Due to the tax reform changes included in the Tax Cuts and Jobs Act (TCJA), the most significant revision of the U.S. tax code in more than 30 years, withholding tables changed for tax year 2018. This could mean less money was taken out of each paycheck and applied to your total tax, so there is less to refund. If you are used to receiving a small refund, you may even owe tax this year.
Other tax reform changes include an increase in the standard deduction, suspension of personal exemptions, an increase in the child tax credit, a limit or discontinuance on certain deductions and a new credit for other dependents. Any or all of these changes could have a significant impact on your total tax, especially in comparison to previous years.
To compare your total tax to last year, look at your 2017 Form 1040, Line 63 and your 2018 Form 1040, Line 15. These amounts represent your total tax liability for each year.
Should I adjust my withholding?
If your refund is smaller than in previous years, or you owe a balance, you can change the amount withheld from your paycheck going forward if you wish. File form W-4 to adjust the amount taken out of each paycheck.
What do I do if I owe money this year?
If you owe money on your federal return, you have until April 15th, 2019 to pay the IRS. Keep in mind, you do not have to pay at the same time you file. You can file your return anytime and wait to pay until April 15th.
If you are unable to pay the money you owe, you can contact the IRS to set up a payment plan. Failing to file your return and pay any tax liability by April 15th may result in penalties, interest charges, tax liens and/or levi
Due to the tax reform changes included in the Tax Cuts and Jobs Act (TCJA), the most significant revision of the U.S. tax code in more than 30 years, withholding tables changed for tax year 2018. This could mean less money was taken out of each paycheck and applied to your total tax, so there is less to refund. If you are used to receiving a small refund, you may even owe tax this year.
Other tax reform changes include an increase in the standard deduction, suspension of personal exemptions, an increase in the child tax credit, a limit or discontinuance on certain deductions and a new credit for other dependents. Any or all of these changes could have a significant impact on your total tax, especially in comparison to previous years.
To compare your total tax to last year, look at your 2017 Form 1040, Line 63 and your 2018 Form 1040, Line 15. These amounts represent your total tax liability for each year.
Should I adjust my withholding?
If your refund is smaller than in previous years, or you owe a balance, you can change the amount withheld from your paycheck going forward if you wish. File form W-4 to adjust the amount taken out of each paycheck.
What do I do if I owe money this year?
If you owe money on your federal return, you have until April 15th, 2019 to pay the IRS. Keep in mind, you do not have to pay at the same time you file. You can file your return anytime and wait to pay until April 15th.
If you are unable to pay the money you owe, you can contact the IRS to set up a payment plan. Failing to file your return and pay any tax liability by April 15th may result in penalties, interest charges, tax liens and/or levi
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