If you’ve already completed your tax work for this year and have noticed that you are getting a smaller tax refund, there’s no reason to panic. That’s because millions of Americans all across the nation will be seeing an estimated 8 percent less in their refund this year and here’s why.
According to The Motley Fool, many disgruntled Americans are blaming the IRS for their reduced refunds. Many families – and especially those with small children – love seeing the extra government-issued bonuses deposited in their bank accounts around this time each year, considering all of the rising everyday living costs. And while a lot of people are pointing their fingers at the government, the smaller refund amounts might be due to an oversight.
The average tax refund for Americans this year is about $1,865 which is down from last year’s amount of $2,035. But before you blame Number 45 for this shrinkage, tax accountants and officials say that it all comes down to the limitations of withholding tables. In other words, the new withholding tables are designed to work with the W-4 forms that many employees have filed with their employers to claim withholding allowances.
Unfortunately, a lot of people neglect this little step. Financial officials insist that it’s up to you – the tax filer – to make sure that you correctly fill out your Form W-4 with your employer. It is also known as the Employee’s Withholding Allowance Certificate. The document is actually pretty easy and straightforward to use. There are two worksheets that come with the withholding: one covering joint filers and another that specifies all of the deductions, credits and other tax breaks that you and your spouse will file together.
If there are any changes in your tax situation, it’s up to you to update your W-4 withholding. Unfortunately, many people this year didn’t update their W-4 forms and that’s why they are receiving smaller refunds in return.
If you have any additional questions or concerns about your tax refund this year, definitely consult your accountant or a trusted financial officer or professional. They can help ease your mind or better yet, make sure that you receive the maximum tax refund that you deserve this year. Otherwise, just keep checking your bank account for that tax refund to transfer and yes, hope for the best.