Share:

If you feel like your 2019 tax return was significantly lower than your 2018 one, you’re not alone. In fact, the IRS reported a 26% decrease in the number of refunds given out this year. As such, you may be wondering what accounted for the cutback. The following guide highlights a few reasons why you might have received less than you anticipated. 

Why Were Tax Returns Smaller This Year?

1. Loss of Deductions

To start, there was a change in policy. The new tax law (the Tax Cuts and Jobs Act) eliminated or decreased some previously acceptable deductions that helped people recover more money during tax season. These include personal exemptions, unreimbursed business expenses, travel costs, and a $10,000 cap on state and local taxes. 

2. Change in Income

tax returnThere are many changes to your financial situation that could impact the amount you took home from your tax return this year. For example, if you were offered a pay raise halfway through the year but you failed to adjust your W-4, you likely owed the IRS money. Other examples include winning money through gambling or the lottery, taking on a side job, or receiving an inheritance. 

3. Change in Filing Status

Similar to the first point, if your filing status changed over the past year, your tax return may have been impacted. For example, if you previously listed a child as a dependant whom no longer relies on you for support, you likely received a smaller refund. The same may be said if you got divorced or sold a house and downsized to a rented space. 

 

If you need help deciphering your tax return, turn to the professionals at Sharrard, McGee and Co., PA in High Point and Greensboro, NC. As a locally owned firm with more than 40 years of experience, they have the accounting prowess to ensure you maintain solid financial health. Visit the website for more information on their services, or call (336) 884-0410 to schedule a consultation today. 

tracking