How the new tax law will affect your 2018 return

Published: Feb. 11, 2019 at 1:08 PM CST
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April 15 is the deadline to file taxes but many people have already gotten a head start. Some people who have filed may have gotten less than what they were expecting.

So far this year, the IRS reports the average refund in 2019 is $170 lower than last year. The average is around $1800 compared to last year's average of slightly more than $2000.

Some of the change is from the Tax Cuts and Jobs Act that went into effect last year.

Robbie Arney, a Senior Tax Analyst for H&R Block says some people may see a change in their refund - or what they owe - because they had more money on their paychecks throughout the year.

"What they don't realize is that when new laws came into effect ... the IRS sent out new withholding tables to everybody. So that meant that less money was being taken out of their taxes which meant they had a bigger paycheck," she said.

Arney says the idea behind the tax reform was so that people wouldn't have to wait till the end of the year to get their money.

"You know it's nice to get a big refund, but on the other hand the IRS has kept that money for you and their not gonna pay you interest like a savings account would," she said.

"You've actually had more money in your pocket."

Arney says there are other things that people need to know when dealing with refunds.

The IRS recommends going online and doing a paycheck check up, that allows you to calculate, based on your situation, the correct amount to be withheld.

Another is the increase in standard deductions, Arney says they almost doubled from 2018. That means fewer people were able to benefit from itemized deductions

She says parents may feel the impact of that most, so child tax deductions have been upped to $2,000.

$1,400 of that can be used as refundable credit - putting more money in parent's pockets.

Overall, Arney says you might actually owe less with these new changes.