Reality Check: Tax Refund Shock
MINNEAPOLIS (WCCO) -- Thousands of Minnesotans may be shocked when they fill out their taxes this year.
Despite that massive tax cut last year, what you get -- or what you pay -- may be a lot different than you think.
You heard it right from the top. President Donald Trump made this statement last year: "We want to give you, the American people, a giant tax cut for Christmas. And when I say giant, I mean giant."
Politicians even campaigned on it. But many of us are like Michael, who emailed "Reality Check" at WCCO-TV to say he's getting less than half of the refund he normally gets.
Michael's frustration is clear:
Where is my tax break we where promised? I have purposely withheld extra$$ for many years so I get a decent refund.. this year I'm getting less than 1/2 compared to last year and several other years going back. Exactly where is my tax reduction Mr Trump????????? I made a whopping $500.00 more in 2018 than 2017, (take home) and yet because of taxx exclusions, I will be getting nearly $3000.00 less back as a tax refund. Every aspect of the cost of living is going up and because of the new tax laws my income is going down.
But the truth is that most of us did see a tax reduction. The richer you are, the more you got.
The non-partisan Tax Policy Center estimates 80.4 percent of taxpayers got a tax cut. But most of us forgot to do something very important last year after the tax bill adjusted the individual tax rates: We did not change the amount of taxes withheld from our take-home pay.
H&R Block reports eight out of 10 taxpayers did not change their W-4s. That's not only affecting your refund, many are actually paying more in taxes.
On top of that, high-tax states like Minnesota got a double-tax-whammy! There's a limit on deducting state and local taxes you can deduct, and a cap on home mortgage interest.
Here's the bottom line: It's very early, but the IRS reports the average refund is down 8.4 percent -- about $170 less this year, than last year. And for some taxpayers, it's a lot less than that.
Meanwhile, the tax cut and increased spending just helped push the national debt to a new high. It hit $22 trillion this week.
In 2016, then-candidate Trump said he could eliminate the national debt "over a period of eight years."
Here Are Some Of The Sources We Used For This Reality Check:
IRS: Filing Season Stats Week Ending Feb 1
Tax Policy Center: Who Got The Tax Cut?