It's tax day! Why am I not getting a refund this year?
The tax reforms that went into effect January 1, 2018 increased standard deductions, increased the child tax credit, eliminated the personal exemption, capped the deduction for state and local taxes, reduced the mortgage interest tax deduction limit from $1M to $750,000, and eliminated the ACA individual mandate. For most middle-income tax payers those changes resulted in a tax reduction. Most people saw more money in their paychecks because the IRS changed its withholding tables to approximate the actual amount that taxpayers would owe under the new law. That makes sense - why should the government keep money that taxpayers do not owe, only to give it back (without interest)? Wouldn’t you rather keep more of your own money? The problem is that people expecting refunds may not be getting refunds, and those who normally come out about even may end up owing, or owing more than expected. If you receive a paycheck, make sure you adjust your withholdings, and for those with non-W2 income, make sure you adjust your estimated tax payments this year to achieve the desired effect next April. Don’t be fooled. For most of us, federal taxes did not go up, but the way they are calculated and collected did change!