Many people look forward to tax time each
year. That’s because, regardless of the hassle of filing, they know they’ll get
a sizable refund come tax time.
The money they get, however, is really just
their own money, handed back to them as a result of paying too much in taxes
throughout the year.
So, while a refund is exciting, if you don’t
get one, or if you get a smaller one than expected, that’s not necessarily a
bad thing. However, if you bank on those refunds each year and are wondering
why you didn’t get more this time around, several things could be to blame.
A
Reduced Mortgage Interest Deduction
The Tax Cuts and Jobs Acts made a lot of
changes to federal tax law, and many of these changes may not have worked in
your favor this tax year.
Take, for example, the mortgage interest
deduction, which got lowered as a result of the new laws. Now, instead of being
able to deduct up to $1 million in mortgage loans, taxpayers can only deduct
interest up to $750,000, which might have cost you a large amount.
No
Moving Expense Deduction
Unfortunately for many taxpayers, a lot of
common deductions were eliminated this year. If you move regularly and usually
get to claim the moving expense deduction, for example, that’s not a
possibility anymore.
Now, the only people who can take this
deduction are members of the US military. So, moving might not have worked in
your favor this time around.
Increased
Standard Deduction Limits
Some people have found that the itemized
deductions they once banked on no longer increase the standard deduction, which
recently had its limits raised.
Now, deduction limits are all the way up
to $24,800 for married couples who file jointly, $18,650 for heads of
household, and $12,400 for individuals.
If your tax refund is lower than expected
or, even worse, non-existent, it could easily be due to one of these reasons or
countless others. The key, though, is not to wallow in pity or get angry. It’s
to take action. Contact a qualified tax professional who can help you to
increase your deduction come tax time next year or who can set up your
financial situation so you don’t have to rely on refunds any longer.