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Q&A: You'll likely get more money in your paycheck this month, thanks to tax changes

Laura McCrystal, The Philadelphia Inquirer on

Published in Home and Consumer News

"You can't just enter the numbers in and say 'done,'" she said. "They hopefully will be able to meet that Feb. 15 deadline or be pretty close to it. But as you trickle down to smaller employers, it may be more difficult for them."

Will everyone get a tax break?

Even if take-home pay goes up, not everyone will get a tax cut. Lawmakers in high-tax states have said they are concerned about constituents who relied on large deductions of state and local income taxes, because that deduction is now capped at $10,000. New Jersey, with its highest-in-the-nation property taxes, is scrambling to soften that blow, through potential changes to the state tax system and a plan to join other states in suing the federal government.

Tax cuts also vary based on how much people earn. "In general, higher-income households receive larger average tax cuts as a percentage of after-tax income, with the largest cuts as a share of income going to taxpayers in the 95th to 99th percentiles of the income distribution," a Tax Policy Center analysis found.

Will taxpayers still get refund checks after filing taxes?

In the process of changing withholding tables, IRS officials said they aimed to limit over- and under-withholding. That means tax refunds will likely shrink for many taxpayers, said David L. Zalles, a Blue Bell tax accountant.

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The average refund for individuals was $2,795 in fiscal year 2016, according to IRS data.

If someone had grown accustomed to large refund checks to pay off debt or fund a vacation, Zalles said, this year's changes may lead to an unpleasant surprise next year.

"They may be happy with (increased take-home pay), and won't be unhappy until they find out that they are not going to get their big refund next year," Zalles said.

Will these changes impact the economy?


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