Page 25 - AT

BUSINESS Wednesday 20 February 2019
A25

I owe how much? Americans shocked by impact of new tax law

By SARAH SKIDMORE SELL make adjustments found
Associated Press they couldn’t get it quite
Wait, I owe the IRS? right.
The first tax filing season Kevin McCreanor of Milton,
under the new federal tax Georgia and his wife nor-
law is proving to be surpris- mally get a sizeable refund
ing, confusing — and oc- each year — it was more
casionally frightening — for than $12,000 last year.
some Americans, espe- While they know waiting for
cially those accustomed to a large refund isn’t the best
getting money back from strategy financially, they
the government. like a refund and they put
Take Andy Kraft and Amy anything they get back
Elias of Portland, Oregon. toward their daughters’
The couple had grown education. Their income,
comfortable getting a earned primarily from his
small refund each year, wife’s job in telecom, can
a few hundred dollars or vary greatly, so there was
more. Then they found out comfort in never facing a
they owe $10,160 this year. big bill.
“I will never forget the mo- The couple increased her
ment, I thought ‘We look paycheck withholdings to
good’ and then we added ensure the same but found
in the next W-2 and my jaw they are only getting back
hit the floor,” Kraft said. $519 this year. Their income
“There was no way I want- and tax rate did increase,
ed to believe that what I In this Friday, Feb. 15, 2019, photo Kevin McCreanor works on a laptop near paperwork in Atlanta. and McCreanor acknowl-
was looking at was accu- Associated Press edges there is probably
rate.” ent,” said Howard Gleck- averaged around $2,800. taxes. more he could have done
President Trump promised man, a senior fellow at the For some low-income It is at best, an estimate. But to prepare but he is very
a reduction in taxes with Tax Policy Center. households it is the biggest it’s an estimate that grew disappointed all the same.
the new law. And by most Kraft and Elias are able to cash infusion of the year. drastically more difficult to Some surprises were wel-
measures, the majority of pay their tax bill but he’s still The IRS reported Thursday make under the new law. come, however. Brian
Americans will see one. stunned. He even tried to that the average tax re- The Government Account- Goodell and his wife typi-
The nonpartisan Tax Poli- reverse-engineer things to fund as of the second week ability Office estimated in cally face a tax bill of
cy Center projected the figure out where they went of filing season was $1,949, a report last summer that anywhere from $10,000 to
tax law would reduce in- wrong, diving into page down 8.7 percent from the about 30 million workers $15,000 each year. But this
dividual income taxes by after page of IRS rules. He year earlier. The total num- had too little withheld from year the Tigard, Oregon,
about $1,260 on average, painstakingly put together ber of refunds is down 16 their paychecks, which couple is getting a $15,000
although it benefits higher all the numbers. The couu- percent. made their take home pay refund. They believe they
earners more. ple ultimately asked a CPA Experts caution it is too bigger but increased their got some benefit from the
So not everyone will see a to verify the figures they early to draw conclusions tax liability. That’s about 3 increased child tax cred-
massive tax bill or a drop in were seeing on TurboTax. about a tax season that million more workers than it. They also made more
their refund. Some people Crushingly, they were cor- ends in April. Plus, the num- normal. charitable donations and
already saw the benefit rect. ber of returns — 27 million Few taxpayers appear increased their withhold-
in the form of bigger pay- Their total tax was up slight- as of Feb. 8 — is down 10 to have heeded the IRS’ ings. While Goodell isn’t en-
checks. That’s because ly — by about $300 be- percent from a year ago, advice to do a “pay- tirely sure why it worked out
the law forced employ- cause of changes to their due in part to the partial check checkup” to make so well, he’ll gladly take the
ers to change what they financial picture. Their ef- government shutdown. The sure they had the proper refund.q
withheld. But the system fective tax rate was lower, picture will become much amount withheld. Payroll
is far from perfect, and but they still owed the gov- clearer as more filings are processor ADP, which is
many workers didn’t have ernment. processed, refunds are is- responsible for paying one
enough in taxes set aside. “I feel like I have reached sued and the IRS gets back out of every six Americans,
Now, the IRS wants that a stage of grief of accep- up to full speed. said the vast majority of
money. tance,” he said. “In a twist- All the same, the initial re- people in its system didn’t
In addition, the law also ed way I should have been sults have surprised early fil- update their withholdings
eliminated personal ex- paying this all year and ers and worried those who last year.
emptions, increased child now I just have to pay it in haven’t yet tackled their Some taxpayers who did
credits, limited popular de- one lump sum.”
ductions and generally up- A number of experts such
ended many familiar prac- as Gleckman are urging
tices that determine what taxpayers to obsess less
happens at tax time. That about their refund or what
has taxpayers feeling a bit they owe when measuring
unmoored. the effect of the new tax
“We were very comfort- law. These are just a sliver
able with our tax law, it of your tax picture.
had basically been there But the truth is, many Amer-
since 1986, suddenly all icans have come to rely on
these things that were refunds. About three-quar-
very important to people ters of U.S. taxpayers typi-
changed ... it’s all differ- cally get one and they had