[EDITOR'S NOTE: This story has been changed to reflect a correction. The story misstated the amount of money that Trisha Ingram and her husband owed in taxes after filing this tax season.]
Due to changes in federal tax law, taxpayers may be receiving smaller or larger tax returns than they planned on receiving, and could even owe money this year, which came as a shock to many.
La Grande resident and owner of Painted Panda day care, Trisha Ingram and her husband are one such family that has received a shock this tax season. Despite trying to offset the blow by having more of their paychecks withheld throughout the year, Ingram reported that between federal and state taxes the couple owes $2,800.
“We’ll be okay, but it’s a bad time of year to find out,” Ingram said, noting they have a child graduating high school in a few months.
Ingram said the thing that affected their tax return the most was the changes in deductions.
“We have a lot of expenses that (my husband’s) job does not cover. We counted on the federal deductions. We counted on that to reduce our tax burden,” she said.
The change in tax law is called the Tax Cuts and Jobs Act and was enacted in December of 2017. It affected tax brackets as well as making changes to withholdings and eliminating some tax deductions. Taxpayers should have started seeing changes in their withholdings on their paychecks in late February of 2018, as it changed the way that employers hold back taxes, according to the IRS website.
However, some taxpayers may end up owing large amounts as a result of not being aware of the changes to withholdings. In order to ensure that the correct amount is being withheld, employees should have filed an updated W-4 form with their employer, according to the IRS website, which provides a withholding calculator to help taxpayers determine how best to fill out their W-4.
In a video entitled “Message to Taxpayers” from the IRS, Chuck Rettig, the commissioner of the IRS, addressed the issue: “With so many changes in the tax law, you may see a different amount in your refund or tax bill when you file. If you want to adjust that amount for 2019, please visit our withholding calculator on IRS.gov as soon as possible for a paycheck checkup.”
Rettig also directed taxpayers to a new section on the IRS website dedicated to the changes and reminded those who owe money that even if they can’t pay the full amount, they should file their taxes on time to avoid penalties.
“Remember, it’s always a good idea to check your tax withholding every year, especially if you made adjustments last year, or if you have any financial or life changes,” he said.
See complete story in Wednesday's Observer