As people prepare their taxes to send to the IRS, some who were expecting refunds have discovered they actually owe federal taxes this year.
The IRS began accepting tax returns on Monday, Jan. 24.
People are growing frustrated to discover this and want to know why, but according to Marca, it goes back to tax cuts that happened while former President Donald Trump was in office.
Reasons you may owe taxes to the IRS
In 2017 the Tax Cuts and Jobs Act when into effect.
Smaller refunds or taxes owed were a result of a reform that was supposed to give everyone tax cuts.
Things like changing jobs and income may impact your result.
You lost deductions
Many people are learning they owe taxes because they have lost deductions they could claim in the past.
There’s a new $10,000 cap on local and state taxes and this eliminates the deduction for job expenses that could have been reimbursed.
Personal exemptions no longer apply.
The goal of eliminating these deductions was that other tax breaks would do well, like standard deductions or the child tax credit.
You have less federal income tax
People pay less federal income tax than they realize.
This started in 2018 and in 2021 the IRS changed their withholding tables.
They tried to match the amount that people would owe under newer tax laws as closely as they could.
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