Rochester. N.Y. (WHAM) - Early into the 2019 tax season, the IRS says refunds have been smaller compared to last year's refunds.
So far, refunds are down more than eight percent. This is the first tax season since a sweeping overhaul to the tax code by Republicans in Washington.
Many Americans are planning how to spend their returns, but those returns could be much smaller. Or, people who typically get refund checks could end up owing money.
"It could be a vacation, a car, whatever, but now it’s not there," says accountant David Young of Young and Co.
Young says two big reasons for the smaller refunds stem from two changes to the tax system—the elimination of certain deductions, and the allowance of fewer withholdings from worker's paychecks.
Allowing fewer withholdings means a small bump in many paychecks. Young says a smaller refund check is making up for getting more money throughout the last year.
"They might not notice that- it’s direct deposit, it’s going in their checking account, they may not notice it but they do notice a big lump sum of money," Young said.
However, getting a smaller refund check or owing money may not mean you're paying more in taxes than last year.
Young says it's important to look at your total taxes paid from the last two years.
"We really need to remind people to look at the total tax we pay," Young said.
If you're wanting a larger tax refund check, Young advises to speak to your employer about adjusting withholdings. He says it might mean a slight drop in your paycheck, but can give your refund check a boost come tax season.
According to IRS data released last week, the number of filings has dropped compared to this point last year. Young says that may be due to changes within the tax laws on the federal and state levels, as well as the recent government shutdown.