VIRGINIA BEACH, Va. — Tax season is here, and taxpayers can expect a smaller tax return this year compared to last year.
The tax reform in 2018 has changed the size of this year's refund.
Why is that? Tax experts said it’s because the Internal Revenue Service has rules. So, employers got a new withholding table for the year.
Withholding tables are the guidelines for how much employers are required to hold back from a worker's paycheck. So, because of the new guidelines, the tax reform gave employees more money during the year.
That means most people received more money in each paycheck, but on average refunds dropped compared to last year's tax season.
Sharon Van Driesen works with Jackson Hewitt. She said getting a lower refund isn't actually a bad thing.
"Each taxpayer has almost three percent less withholding in their pay than they had before,” said Van Driesen.
In addition to less money back, Van Driesen said some filers might end up owing the I.R.S money.
Van Driesen said owing the IRS is usually due to a substantial raise, experienced a life change, or a taxpayer didn't change their W-4. A W-4 is the form used to let an employer know how much to withhold from a paycheck.
"It's a new tax reform it's a combination of everything. So, this is the year people need to see a tax professional,” said Van Driesen."We're glad to help them fill out their W-4 and adjust it and look at what they did last year and what their goals are for this year."
Either way, before making any refund money plans, make sure to file your taxes early and wait to see how much you get or owe the I.R.S.
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