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So, let’s agree, we should have seen it coming. I even warned everyone in a past blog post:

August 2018: “In the wake of last year’s Tax Cuts and Jobs Act (TCJA), you may not discover whether your 2018 tax bill ends up higher or lower until you or your accountant start plugging numbers into the IRS’s new filing forms sometime after year-end. But there is one task worth crossing off the to-do list today: Is your employer withholding an appropriate amount for your taxes owed?”

At the time, we recommended performing a “paycheck checkup” with this withholding tax calculator:

Still, many Americans were caught unaware anyway. And many aren’t happy about receiving smaller-than-expected refunds, or even owing taxes come April.

First, let’s be clear. Even if your 2018 refund is smaller, or even if you end up owing the government on April 15, you may still be paying lower overall taxes than you would have under the old tax codes.

What happened is this. Effective January 1, 2018, the TCJA was expected on balance to reduce the 2018 income tax owed by 80% of taxpayers, raise taxes for 5% of the population, and generate little or no change for the remaining 15%.

Last January, the IRS revised their income tax payroll withholding tables downward accordingly. So, unless you said otherwise (which few likely did), your employer started withholding less from your paycheck. The reasoning was, since most taxpayers would pay less income tax, they shouldn’t have to have as much withheld to cover it.

The thing is, even though income taxes probably did decline for most workers, their new withholdings decreased even more. The result? Taxpayers who were used to a certain refund saw it decline too, sometimes even ending up with a tax balance due at year-end.

Okay, fool me once. But you might be able to do something about it this year. Visit that IRS withholding calculator above, and make sure you are having enough withheld in 2019. If not, talk to your employer.

Fool me twice? Let’s hope not.

To read my past articles please visit and select the InsideNoVa library.

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