Tax season has come and gone — at least for the more than 103 million filers who submitted their returns before April 15.
This spring marked the first time taxpayers and their accountants submitted tax returns under the Tax Cuts and Jobs Act.
The overhaul of the tax code, which went into effect in 2018, increased the standard deduction to $12,000 for singles ($24,000 for married couples filing jointly), eliminated personal exemptions and curbed a number of itemized deductions.
The Treasury Department and the IRS also updated the withholding tables last year to reflect the new laws. These tables, when used with Form W-4, help employers deduct income taxes from your pay.
Overall, individual income tax rates also went down.
Amid all of these changes, taxpayers have one burning question: “How did I fare under the new tax law?”
Many are looking to their refunds as an indicator of how they did, but those checks only tell part of the story.
The IRS paid $220.7 billion in total refunds as of April 5, down by about $6 billion from a year ago, according to the agency. The average refund check is $2,833, down by about $30 from last year.
“People are looking at the bottom line, which for them is the consequence of filing the return then and there: Did you get a refund or do you have a balance due?” said Nathan Rigney, lead tax research analyst at the Tax Institute at H&R Block.