TYLER, TX (KLTV) - This year, we will see tax reform set in place by President Donald Trump play out.
GMET’S Brennon Gurley spoke to a CPA about what people need to know before they file their taxes.
What happened to my refund? That is the question many are asking Kimberly Park, a certified public accountant, as tax season ramps up.
“Most of it is just concern. A lot of it is what they’re hearing, just some panic, of ‘Oh, am I going to owe money this year?’” Park said.
On average, according to the IRS, the average refund is down 8.4 percent compared to last year.
“Now that tax returns and W2s have been issued and now that tax returns are starting to be filed people are starting to notice that their refunds are a little bit lower as a result of the new tax law,” Park explained.
Park said she’s been fielding questions from her clients who are wondering what changes they’ll see when they file their 2018 taxes.
“One of the major changes is the doubling in the standard deduction, which is where you would typically deduct property taxes, mortgage interest, sales tax, state income tax,” Park said.
They’ve doubled, meaning that for single filers, the standard deduction is $12,000. For those filing jointly in a marriage, the standard deduction is $24,000.
The new tax code, Park said, changed the withholding structure, taking less money out all year, anticipating that your taxes are going to be less.
“They kind of gave you part of your refund that you were normally seeing in years prior, kind of gave that to you during the year as the year went by and so now your refund is a little bit less,” Park added.
Tax preparers say people are paying fewer taxes. The tax overhaul changed how much money is withheld from your paycheck every period. However, your refund is different, and those filing taxes hope the changes work in your favor.
“Overall, I think it’s a good impact. I think it’s more money in people’s pockets. In the end it’s more money in people’s pockets, which means they’re going to spend more money," Park said.
If you want a larger refund, talk with your employer about your withholdings to take more money out of each paycheck.