IRS expects more will owe at tax time

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KANSAS CITY, Mo. -- As the Internal Revenue Service begins processing tax returns Monday, the government says it expects more people than usual will owe taxes for 2018.

Your taxes may be have been cut last year, but that doesn't automatically mean you're going to get a refund.

That's because employers reduced the amount of money they took out of your paycheck last year to pay the smaller tax bill. And for some, employers may not have taken out enough.

The IRS says those who used to itemize deductions and now can't, and households with two wage earners are most at risk for a tax surprise in April.

"You have to look at the full picture," said Andy Phillips, a director at the Tax Institute of H&R Block. "You may feel, 'Hey, I didn’t come off as well compared to last year because my refund was lower or I have a balance due.' But you have to look at the total taxes paid. That’s the bottom line. Am I better off or not? Even if, when it comes to filing time, you don’t feel like a winner."

Because of all the tax code changes, the IRS has relaxed its rules for imposing penalties on underpaid taxpayers.

Those who've withheld at least 85 percent of their taxes before filing won't face any penalties.

Usually, people who pay less than 90 percent of their taxes before filing a return also have to pay a penalty.

Last year nearly three out of four taxpayers got a refund. The average refund was nearly $2,900. This year, even the experts aren't sure how many people are going to get refunds.



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