turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

amebee79
New Member

Normally our refund is 6000 to 7000 dollars between federal and state. This year it was 2500. Pretty sure we didnt change tax brackets. What caused this??

 
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

2 Replies

Normally our refund is 6000 to 7000 dollars between federal and state. This year it was 2500. Pretty sure we didnt change tax brackets. What caused this??

Major 2018 Federal tax law change.

Normally our refund is 6000 to 7000 dollars between federal and state. This year it was 2500. Pretty sure we didnt change tax brackets. What caused this??

Aside from the possibility of a typo (so recheck everything that you entered), there are a variety of possible reasons.

The first is that the Tax Cut and Jobs Act of 2017 made a number of changes that reduced or eliminated some deductions, like for mortgage interest, state and local property and sales taxes, and moving expenses. Some taxpayers will find that they actually owe more money after the tax reform. Some taxpayers had their SALT taxes (State And Local Taxes) sharply limited. Some taxpayers were hurt by the elimination of the personal exemption. Some taxpayers were hurt by the elimination of the deduction of unreimbursed employee business expenses. And the Act increased the Child Tax Credit from $1,000 to $2,000, but that counted only for children 16 and under.

You can find a detailed list of the changes at the IRS website as https://www.irs.gov/pub/irs-pdf/p5307.pdf

Also after the Tax Cut and Jobs Act tax reform passed in 2017, the IRS updated the withholding tables to reflect the tax law changes. However, the tax reductions were not equal across the board - some taxpayers will actually owe more tax - so the IRS urged taxpayers to review their withholding all during 2018.

This means that some (many) taxpayers underwithheld compared to last year.

I don't have enough information on your return, but the tax withholding tables were another thing that changed for your return that may have had a large impact on your refund/tax due.

See https://www.irs.gov/newsroom/irs-withholding-tables-frequently-asked-questions

Note that the withholding tables are set up on the assumption that you have one job. If you have two jobs, then your total income may push you into the next tax bracket, and the W-2 withholding will have not quite enough withholding for that.

This situation has caught the attention of the national press - please see https://www.usatoday.com/story/money/2019/02/08/taxes-2019-why-my-refund-lower-2019/2816418002/

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question