A lot has changed in a year. With new income tax laws fully in effect, 2019 tax refunds are a hot topic of discussion. While some people’s refund checks are expected to increase substantially, others may not be quite so lucky. In fact, experts predict that millions of Americans could be in for a surprise.
How this Year’s Tax Refunds will be Different
The Tax Cuts and Jobs Act, which went into effect in 2019, lowered most individual income tax brackets to allow workers to hold on to more of their paychecks. The tax overhaul also creates tax savings by doubling the standard deduction for all types of individual tax filers.
In the first tax year since the overhaul, millions of Americans are expected to receive larger tax refunds than 2018’s average of $2,825.
Morgan Stanley has projected that total 2019 refunds will be 26 percent higher than given back by the IRS last year.
Why you Might get a Bigger Refund than Expected
Some experts predict that married couples with children will do the best this tax season. They could see a substantial increase in the size of their tax returns as a result of the changes, such as an increase in the standard deduction and the Child Tax Credit.
Who Might get Less Back than Anticipated
As a result of the tax law’s changes to payroll withholding, some individual filers may receive slightly smaller tax refunds than expected. Those who have not properly adjusted their tax withholding could be surprised by the amount of the check they receive from the IRS.
This includes not only individual filers, but also:
- Two-income families
- Families with dependents, ages 17 or older
- Households with high incomes
- Homeowners who live in high-property tax states, like New York and California
- Those with complex returns
In 2019, tax day is Monday, April 15. Although the deadline is a few months away, it pays to get organized as soon as possible. If you have questions about personal income tax planning and preparation, contact a local tax professional today.