"Americans are obsessed with their refunds.... " "expect and even rely on that refund."

[Demovictory9]

Tax code changes leave Americans asking, 'What happened to my refund?'
"If I were to estimate, two-thirds will pay more than they thought and one-third will get more than they thought,” said one tax preparer.

With filing season officially under way, a growing number of taxpayers are realizing that the Tax Cuts and Jobs Act might be a double-edged sword.

The White House said in October 2017 that the average family “would get a $4,000 raise” when it was pushing for passage of the law. Now that the new filing season has begun, some taxpayers are finding out that the tax man giveth — but also taketh away, especially as it pertains to their annual refund.

“Americans are obsessed with their refunds. What really matters is whether your taxes went up or down, not whether your refund went down,” said Howard Gleckman, senior fellow at the Urban Brookings Tax Policy Center. “It’s really important that people don’t confuse their refund with the taxes they pay,” he said.

But even as Gleckman pointed out that some people’s overall tax burdens might be smaller this year, he acknowledged that many people come to expect and even rely on that refund.

“The people who file early are the people who generally count on these refunds. They may have an expectation of higher refunds,” he said. These taxpayers, especially those who hold down multiple jobs, could be in for a rude awakening.

https://www.nbcnews.com/business/taxes/tax-code-changes-leave-americans-asking-what-happened-my-refund-n969366?cid=sm_npd_nn_tw_ma

[MichMan]

1. Taxes are the only bill that people would rather overpay all year and get some back a year later

"What really matters is whether your taxes went up or down, not whether your refund went down,”

You never hear of anyone overpaying their electric bill every month so they can get a refund months later.

I haven't filed yet, so I don't know what is going to happen. I am hoping that since I haven't itemized for a decade, that mine will go down. I will look at the total taxes owed and compare with last year, not how much I have to pay compared to what was withheld.

[dumbcat]

3. Most people only ever look at one line on a 1040

and that's the Refund Due line. I'd bet most people don't even know where the Total Tax line is on the 1040, much less look at it or know how it is calculated.

I, in fact, just did what you plan. I did my taxes this year using Turbotax as usual. Then I went back and plugged the same numbers into my last year's TT to see what would have been due under the old deductions and brackets. Under the new rules this year my Total Tax is $1,701 less than it would have been under the previous rules. The GOP tax bill worked out well for me.

[JHB]

12. Most people don't have their electric bill automatically deducted...

...from their paychecks, then periodically adjusted for actual use with a refund or payment due.

Consider how we've heard stories how many are living paycheck to paycheck, how "X percent of Americans can't come up with $2000 in for an emergency", and the sudden change from refund to out-of-pocket expense takes on new significance.

[DeminPennswoods]

24. Actually, most utilities offer budget plans

where customers "overpay" in one season to "underpay" in another. They also offer electronic funds transfers from bank accounts. The budget plan works out great for me in smoothing out one of my most expensive utility cost.

With the stock market hitting record highs in 2018 and the Fed raising interest rates, anyone with investment income or interest bearing bank accounts, is going to get dinged more than in 2017.

For anyone using TurboTax yearly, it gives you a 5 year history of your income and effective tax rate for comparisons.

[elias7]

2. Blame Trump?

[marlakay]

4. I knew when we got an extra $20

In paycheck it was because they were manipulating the net pay hoping people would be happy and vote R in midterms, they weren’t thinking about anger now.

I usually get a few hundred back because my goal is not to use the government as my savings account. But then I used to be a bookkeeper for years and do my own taxes.

I haven’t done them yet this year and figure I will probably owe but a few hundred instead of a refund. I am still getting over bad flu and waiting till I mentally feel like dealing with it.

After I see what I owe I will change amount taken out so next year ok.

[Wellstone ruled]

5. This will be the true down fall of the Rethugs.

Once all of those Independents and Right Wingers have to go to a PayDay Loan Shark to pay their Taxes,it will be over in one hell of a major way.

[TexasBushwhacker]

6. Many people would rather over withhold

than risk owing at tax time. That's their prerogative. Especially if they have multiple jobs, it's easy to UNDER withhold. So don't blame folks and say they are "obsessed with their refunds". With savings accounts paying 1%, if you're lucky, parking the money with Uncle Sam makes just as much sense as anything else.

[Honeycombe8]

14. Savings accounts pay over 2% now.

Of course, people probably don't shop around and just take whatever their local bank is paying.

I think they'd rather overpay because of the unknown. If they underpay, they won't know until they do their taxes how much they owe. If they'd stick something extra from their paycheck, even a small amount, in the bank for every paycheck, that would help them.

I never saw the sense, though, in intentionally overpaying and giving the govt your own money that you could get interest on through the year. Even if the interest didn't amount to much, it was something.

[TexasBushwhacker]

15. Even 2% isn't persuasive

Some folks have to use Uncle Sam as their bank because they have access to their savings account throughout the year and are more likely to spend that money. For a lot of people, their tax refund pays for a vacation or some other big ticket item.

[Honeycombe8]

21. Yes, I've known people who were that way.

I guess I had more discipline. In my early working days, I was very poor. I became very frugal.

[a kennedy]

7. I want to know when this happened......the tRump tax bill???

Last edited Sat Feb 9, 2019, 10:28 PM - Edit history (1)

when the Repubs owned both the House and Senate and passed this tax bill??? I want to know when this happened??

[KelleyKramer]

8. December 2017 nt

[tiredtoo]

9. Never wanted a large refund

But i didn't want a large bill either.
Last year my income increased about 9 percent. My refund decreased 78 percent.

[iluvtennis]

20. wow, just wow, a 78% decrease in your refund

[apkhgp]

22. Refund decreases 78 percent

That kind of number coming from a Taxation system implemented by the present administration is unacceptable.

Even if the Refund decreased by only half 39 percent that would be unacceptable as well. These people are messing with our finances. This goes on top of what we see happening in the Stock Market. And we are supposed to have faith in 45 to do the right thing for us.

BULLSHIT heaping tons of it delivered straight to his desk.

[ToxMarz]

10. I would be interested in an in depth look at the "average" $4000 raise

I think the median raise might be a better measure. A few people getting a substantial "raise" with a lot getting no or very small raise could be an average of $4000.


According to the Federal Reserve, the average net worth for families in the U.S. under the age of 35 was $76,200 in 2016. That same year, the median net worth was $11,100, so keep in mind that the average is skewed by a small percentage of affluent Americans.

https://turbo.intuit.com/blog/real-money-talk/net-worth-by-age-704/

[Honeycombe8]

18. Wow, that's interesting.

I didn't know turbo provided that info, and I've been using that to do my taxes for years.

[B Stieg]

11. Completing tRump's Bait 'n Switch

He's been doing this for decades...

[PoindexterOglethorpe]

13. I have tried to persuade many people over many years

that they shouldn't be giving an interest-free loan to the government. I never succeed.

The ideal strategy, if you can make it happen, is to owe enough at filing time that there are no penalties and you don't have to file estimated taxes the next year. Although estimated taxes really aren't so bad. My income has often been erratic so that one year I get a refund (which is always applied to next year's taxes) and the next I'm sending in estimated taxes. Unlike a lot of people I'm good at not spending every cent I get, so I can manage the swings from year to year.

I need to make an appointment with my tax guy, and I wouldn't be surprised if after three years in a row of not paying any state or Federal income tax, because of a change in the source of my income, I owe a bit this year. But maybe not, because my income is pretty low.

[donkeypoofed]

16. It's easier to have the govt take more cause then you wont spend it!

If I don't see it, I cant spend it ! People who have a hard time saving do it this way so they actually get a chunk of money back all-at-once.

So if people are angry about their taxes now, the worst is yet to come!

[Laura PourMeADrink]

17. Yahoo had headline that people angry. But just

Glanced through maybe the first 50 comments and most are happy. Sounds like snafu during year. Some people never changed their withholding and got a lot back others did change withholding and got a little back or had to pay. Bottom line these headlines are probably not completely true

[iluvtennis]

19. I do rely on the refund. As a single mom, I use credit cards to take care of expenses that the

monthly budget doesn't cover. I make a little more than the minimum on the credit card payments (I know that's bad, but no other option) each month and I use the tax refund to pay off the credit cards in full

And this #GOPTaxScam is really hurting me as a Californian as we are went from being able to write off unlimited property taxes & state income taxes -- now it's limited to $10,000. Property values here in CA are HIGH, so that $10,000 provides very little relief.

[MichMan]

23. Why would you lend the governemt money interest free every week.....

….. and then borrow using credit cards charging interest at the same time?