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.
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This was what happened to Jason Marques, a postal worker, pizza delivery driver and student in Massachusetts who said that, since his income didn’t change, he was expecting a similar refund to the roughly $6,000 he got last year — money he said would go towards his student loans or paying off credit card debt.
Marques said he was hurt by the cap on student loan interest deduction and the elimination of non-reimbursed business expenses, which he used to deduct the out-of-pocket costs he incurred as a delivery driver. “My jaw hit the floor,” he said, when he learned his 2018 refund would be under $500.
“I could’ve really used that money to eliminate it all.”
Early filers have been taking to social media to express their ire at finding that their refunds were a fraction of what they anticipated or — worse yet — that they would owe an unexpected bill to the IRS.
“That campaign promise was one of the only two reasons I voted for you,” wrote Twitter user Dee Nelson.
“Rethinking that decision now.”
Facebook user Erin Boyd told of a similar unpleasant surprise in a comment on the social media platform.
While some people likely noticed an uptick in their take-home pay, the amount might have been small enough that people didn’t notice, especially those who get direct deposit and might not look at their pay stubs.
“It looks like it was a bunch of gimmicking,” he said. “I didn’t know how badly it was actually going to hurt.
It’s not yet clear how common experiences like Marques’ will be — or if that could impact consumer spending. Last year, the IRS issued nearly 111 million refunds out of roughly 153 million returns submitted, with an average amount of $2,825.
A July report from the Government Accountability Office said more than 20 percent of taxpayers will owe the IRS come April, and due to the changes in the tax law, even the experts say it’s hard to guess who might wind up in the red to the taxman.
“It’s too soon to know what’s really going to happen,” Gleckman said.
Taxpayers who live in states with high costs of living or who used to take a lot of real estate-, tax- or work-related deductions also should be prepared to have to break out their checkbooks come April, Charron said.
Since Charron is based in New York City, his clients tend to come from areas with high home prices and property taxes. “If I were to estimate, two-thirds will pay more than they thought and one-third will get more than they thought,” he said.
“I had a call yesterday with a client and I had to tell him his withholdings were short by $16,000.”
This is the kind of outcome Marguerite Garcia is dreading.