The first filing season after the Tax Cuts and Jobs Act (TCJA) went into effect has shown a reduction in refund amounts of about 8% (as of mid-February ‘19) from prior years. However, one of the more important numbers taxpayers should focus on is their tax liability. Did you pay less taxes on the same money from 2017 to 2018? More? What was your effective tax rate? In 2017?
Only time will tell the true effects and consequences of the TCJA, but in the meantime it’s wise to focus on the right numbers and what they mean to each of us specifically. This focus will help avoid surprises in the future and the time to do it is now.