You may be among the many in Connecticut and across the country who hoped the recent changes in the tax law would benefit you. If you count on a refund for bills, vacation or to stash away as savings, you may have wondered if the new tax laws would give your refund a little bump. On the other hand, after years of getting nothing back from the IRS, you may have expected to get even a small refund.
Unfortunately, you and others were disappointed to learn that your refund will be considerably smaller than in the past. In fact, many are seeing refunds over 8 percent lower than last year. You may have even more trouble if you are among the many who owe money to the IRS. While this may be a shock, you can take some steps to ease the pain.
Avoid further complications
If you have tallied up your taxes and discovered you owe the IRS a significant amount, it is probably because the recent revisions in tax withholdings and increased standard deduction resulted in less money withheld from your check for federal taxes. You may not have noticed a slight increase in your paycheck, but it adds up, especially if you are used to using deductions and personal exemptions to keep your tax bill low. Some taxpayers have reported a jump of over $10,000 in their tax bills.
Is your story similar? The IRS recommends you take the following steps to deal with the matter:
- Go ahead and file your tax return to avoid additional penalties for late filing. If you can’t file on time, don’t wait to request a filing extension.
- Pay the IRS any amount you can by the filing deadline.
- Ask for information about the various payment plans available through the IRS.
- Do not give your money or personal information to a company or individual who promises to reduce your tax debt. This is likely a scam.
- If even a payment plan creates a hardship for you, consider requesting that the IRS file your account as “currently not collectible,” which will delay your payment but not relieve you of interest and penalties that accrue.
Most importantly, you should remember that you are not alone in your struggles with the IRS. You have options, including consulting with a skilled tax attorney who can advocate for you during any of your challenges with the IRS.