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 prevent this from causing you too much financial distress, it helps to know what's coming and how to prepare for it. (See TAX-R-US 2018 Tax Reform Review).
Why you might owe money - despite lower taxes
When federal 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 paycheck 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...