Did You Get Less of a Refund than Last Year? Here’s Why

Millions of Americans count on a tax refund every year. After all, if you’ve been working a job for many years and receiving roughly the same tax refund, you’re going to assume you’re getting money back again. But you may have been surprised to see that when everything was said and done on 2018’s taxes, your refund ended up being substantially less than before. Maybe you’ll have to skip that vacation or curb your spending a bit.

The fact is, tax law will shift how much you get back each year. The easiest way to avoid surprises is by working with a professional for tax preparation in Des Moines, IA. Let’s take a look at the reasons why many people received a lower refund this past year.

  • You weren’t the only one: The IRS reported that tax refunds were down about 8 percent compared to the previous year. So, if your refund was less than you thought, it’s likely not a mistake—some changes have altered the tax landscape. On the other hand, some people actually saw a significant positive change in their refund. This includes people who take the standard deduction and don’t itemize their taxes—the standard deduction went up to $12,000 for single individuals and $24,000 for married couples filing jointly.
  • No more personal exemption: The loss of the $4,100 personal exemption was a big change in tax law. That means your taxable income just went up by more than $4,000! For many individuals, this was the single biggest exemption they previously claimed and they didn’t account for it going away.
  • Limits on property tax deductions: Another major change is that property tax exemptions now only extend to $10,000. If you’re paying more than $10,000 in property taxes, everything after that is now considered taxable income. This mostly applies to those in high-income communities with homes worth more than $300,000.
  • Bigger paychecks: You might not have noticed it as the amount is spread out over the whole year, but employers are withholding less than previously. Maybe you thought that was all the tax cut, but unfortunately it wasn’t. While the extra pay is a nice little bump every week, it means that at the end of the year, you’re going to owe the government more.

There’s one simple way to avoid Tax Day surprises and keep your budget in the black—hire a specialist in tax preparation in Des Moines, IA. Accounting & Tax Professionals, PLC is Iowa’s premier tax preparation and accounting firm. We’re a locally owned and operated business and take great pride in assisting our neighbors with unparalleled services.

We have two enrolled agents on staff and offer a wide array of personal and business services including tax resolution, tax audit representation, tax preparation, small business accounting and notary services. On top of that, we provide payroll, investment consultation, financial and tax planning, and more. Call us today to learn more about our services and receive a free estimate.

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