One in five fear they’ll owe the IRS money this spring

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Tax season is starting off with a whimper, as 1 in 5 people predict they will owe the IRS this tax season.

Those were the findings from a recent survey by NerdWallet. The personal finance website polled 2,002 adults online from Nov. 18 through Nov. 20, 2019.

Taxpayers who think they’ll owe the government expect to pay an average of $2,667, according to the survey.
“One of the things we think is happening is that it’s partially due to the tax law changes we saw last year,” said Andrea Coombes, a tax specialist at NerdWallet.
Indeed, the Tax Cuts and Jobs Act went into effect in 2018, resulting in a nearly doubled standard deduction, curbs on certain itemized deductions and the elimination of personal exemptions.

Taxpayers often didn’t grasp the full impact of those changes until they filed their 2018 returns last spring.

Meanwhile, just over half of participants said they expect to receive a refund when they file their 2019 returns, NerdWallet found.

That’s down sharply from the 86% of participants who last year had anticipated getting money back from Uncle Sam after filing their 2018 tax paperwork.

This may not necessarily be a bad thing.

In fact, it may be a sign that taxpayers are better understanding how the Tax Cuts and Jobs Act affects the taxes withheld from their pay.

Overall, the new law reduced individual income tax rates and led to an overhaul of the withholding tables employers use to deduct income taxes from employees’ paychecks…Read more>>

Source:-cnbc