MANY AMERICANS WILL OWE TAXES IN APRIL
Many americans will owe taxes in april. That may come as a shock after passage of the Tax Cuts and Jobs Act, but the truth is that the bill President Trump and the Congress passed is turning out to be a case by case basis, for many people. Even though the majority will get a substantial decrease in taxes owed, individual circumstances are showing that some people are ending up with an actual tax increase. Many americans will owes taxes in april.
Millions of Americans are benefiting from lower federal income tax rates, yet an unusual number of them may be surprised to find they owe taxes when they file their 2018 returns. To save this from causing you too much financial distress, it helps to know what’s coming and how to prepare for it. When federal IRS income tax rates were lowered for this year, millions of workers started seeing more money in their weekly paychecks. They may also associate a tax cut with the probability of getting a tax refund next year. Instead though, changes in how paychecks withholding is being handled may result in more Americans owing money next tax season than in past years.
The sources of the problem include both how withholding instructions are given and the new tax laws themselves. Responsibility for providing withholding tables to employers was transferred from the Internal Revenue Service to the Treasury Department when the tax bill passed. In an effort to get those table out to employers early in the year–very early after the tax law passed–it seems the tables may not have fully accounted for all the complexities of the new law.
The upshot is that the Treasury Department estimates that 21 percent of Americans are being “under withheld” that is, having less money withheld from their paychecks than they will likely owe. This is up from 18 percent who would have been under withheld under the old system. So yes, many americans will owe taxes in april. Those that do can contact a Tax Resolution Services firm for help with Tax Relief options they may qualify for in the Internal Revenue Code, like an Offer in Compromise, which is only one of the many options in the IRS Fresh Start Program. For best results contact a Tax Professional with years of experience in this area of taxation.