If you were used to making big purchases or go on a summer vacation with your tax refund, you may want to wait to learn how much tax refund you will be getting back before you make any purchases or plans this year. Although most American taxpayers are now paying less tax compared to previous years, this effects the amount of refund we are getting. The IRS reports the average refund is down by 8% in 2019 as a result of 2017’s tax cut. Although there are some more dramatical smaller refunds, some people are actually getting larger refunds this year due to the larger standard deduction. However, our only focus on here is to figure out why you got less tax refund this year. For the most part, there are two major reasons why most taxpayers have gotten lesser refunds this year.
Personal Exemption Elimination
After the new Tax Cuts and Jobs Act, personal exemptions are no longer available for taxpayers to claim. This is due to the increase in the standard deduction. The $4,000 loss of this exemption was very valuable since it lowered your taxable income by an efficient amount.
State and Property Tax Deduction Limit
There is a now a decrease in state and property deductions from $15,000 in previously to $10,000 for 2018 tax year through 2025. This limit primarily affects those living in high tax communities, in homes valued above $350,000.
On top of all of this, the doubled standard deduction and above-the-line deductions are a good way that taxpayers reduce their taxable incomes so they pay less tax, therefore they get less refund in return. We highly suggest checking into the total amount paid in taxes last year and the refund you got and compare them with your recent paid taxes and refund to see if there is anything sketchy. The percentages should be very close to each other. If not, you can always ask the IRS for further questions or consult a professional.
For refund related inquiries you can contact the IRS from the phone number below.