Did you get a surprise tax bill this year? You're not alone:
More people ended up with a tax bill this tax season compared to a year ago, according to new data from an Internal Revenue Service watchdog.
‘There were noticeably more tax returns filed by taxpayers who owed tax at the time they filed their 2018 tax return.’ —National Taxpayer Advocate Nina Olson’s annual report. The tax-bill figures are based on return tallies as of late April. The IRS is also estimating it will receive a record 14.6 million extension requests to file returns this year.
The Treasury Department has put the smaller refunds in context by saying many taxpayers saw larger paychecks throughout the year. About 90% of workers saw bigger paychecks under the new rules. The massive tax preparer H&R Block HRB, -0.50% made the same point in April, noting its clients were being taxed 25% less than year ago but receiving 1.4% average increases in their refunds. The disconnect between lower taxes and an underwhelming refund was explained by the fact that many taxpayers didn’t change their withholding amounts after the law took effect, according to the company.
A Manhattan federal judge heard arguments on the case earlier this week. Judge J. Paul Oetken didn’t hint how he’d rule.
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