Olde Hornet
Well-Known Member
Conor Barnes, an accountant in New York, decided to stop telling her clients to “have a nice day” at the end of their meetings. Often she delivered news that had, in fact, ruined their day: They owed the government money, sometimes a painfully large amount.
The overhaul of the tax code — the first in three decades — caused much confusion this tax season, which was only worsened by the monthlong government shutdown. Many taxpayers were upset when they found out that they owed money to the federal government, even if their tax burden was lower.
And if taxpayers don’t adjust their paycheck withholdings, next year could bring an even bigger shock.
“If they don’t go out and make a change now, they will have even less withheld in 2019, so their situation will just get worse,” said Nathan Rigney, a lead tax research analyst at H&R Block’s Tax Institute.
How did it happen? New guidance from the Internal Revenue Service prompted employers to adjust workers’ paychecks last March in an attempt to match up what they would owe under the new tax plan. And in some cases — if taxpayers didn’t update the relevant withholding forms — they ended up owing money, even if their total tax liability dropped.