Why you should expect a lower tax refund this year
DETROIT (FOX 2) - If you're banking on a bigger tax refund this year because of new tax laws, you may want to rethink that. While the new filing is supposed to be easier, it may not mean you get as much of a refund.
The first thing you'll notice when you sit down to do your taxes this year is the new form.
"The only information on page one is your name, address, the number of dependents you have and your signature. And on page two: wages, interest, dividends, one line for tax, one line for credits and the amount you getting back," CPA Margaret Amsden said. "It is easier for the average person. They did get rid of the 1040A, the 1040 EZ that some people used to file, now everyone will file the 1040,"
That's not all. Your refund check may be less - a lot less - than last year.
"So your tax is going to come but the amount you paid in has also come down. So whether or not your check is going to be the same or bigger or smaller, depends on how that has changed," Amsden said.
The bottom line is that most people are paying less in taxes in every paycheck because of the new tax law. Since you paid less in taxes every check, your refund may not be as big as it was in the past - and some will pay more.
"They tend to be dual wage earners. They tend to be people who had large itemized deductions that they've lost. People that had children that qualified as dependents before but don't qualify for the child tax credit now," Amsden said.
The thing is you can't win both on your biweekly paycheck and at refund. In general, most people have paid less than they have before so the refunds will be less too.
"The average person's taxes are going to go down. The rates are lower, the brackets are broader, the average person is going to see a lower tax liability," Amsden said.