Your tax refund probably wasn’t much different than last year’s. Here’s why

Individual taxpayers could still have seen a dramatic shift in their refund because of the new law or because of life changes, such as getting married or having a child. But Americans as a whole did not see major spikes or drops in their refunds.

“They didn’t have this refund catastrophe that some people predicted,” said Howard Gleckman, a senior fellow in the Urban-Brookings Tax Policy Center, a nonpartisan think tank based in Washington, D.C.

The tax overhaul was passed in December 2017, which meant businesses only had a few weeks to change their calculations for how much taxes to withhold from employees’ paychecks the following year. The new calculations had to account for a number of changes in the tax code, including lower income tax rates, a doubling of the standard deduction, and new caps on the mortgage interest and local tax deductions.

Surprisingly, Gleckman said, companies “got remarkably close” to withholding the correct amount.

About the same number of Americans received a tax refund in 2019 as in 2018. Of all the tax returns filed this year, 73.2 percent received a refund, compared to 73.1 percent last year.

Another surprise: Despite the added complexity of the new tax rules, 4.2 percent more people prepared their own tax filings instead of using a tax professional.

Tax refunds and the way they are filed fluctuate each year, so tax experts cautioned against attributing the decline in the average return to any one factor.

Sincerely,

Ahmad Malik

Mid America Tax Planners c/o Multi Services - Tax & Accounting

https://www.accounting-usa.com

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