TAX DAY: WHY IS YOUR REFUND SMALLER?

Tax Consultants Prepare For New Tax Guidelines

There is a reason many Americans are getting smaller refunds this year. Millions of Americans are filing their taxes for the first time since the 2017 tax cuts went into effect.

The average refund this year is actually about 8% smaller than in previous years.

If you are getting a tax cut, shouldn't you be getting a larger refund? Well, not in this case.

It turns out that employers were instructed by the Federal Government to withhold less from your check each payday to correspond the tax cuts. Therefore, you were getting a little tax cut every two weeks on your paycheck as the government held less of your money until tax day.

Rather than letting the government hold your money for up to a year and pay you no interest, they decided to let you keep more of your money each payday. This means you still got the tax cut. You just didn't see it in a lump sum at the end of the year in the form of a refund.

A refund simply means you are getting your money back. It was your money to begin with. The government just decides to hold it until they decide how much you really owe. Then, they give you the extra back. Still your money.

If you would like a chunk of your money back at the end of the year, set up a separate savings account. Send automatic withdrawals into the account and don't look at it. If you deposit $50 every two weeks, you will have $1,300 at the end of the year ... plus interest! Now, you have more money than the government would have let you have back.

Here is a longer description if you are interested.

[YOUR TAX REFUND MIGHT BE SMALLER THIS YEAR - HERE'S WHY]

If you want a big chunk of money at the end of each year, set up automatic withdrawl

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