The U.S. Cut Taxes. Why Will Fewer People Get Refunds?

U.S. taxpayers are filing their first returns under the 2017 tax code overhaul that lowered rates for most people. What makes the paperwork headaches tolerable for many is the promise of a tax refund at the finish line. Yet more taxpayers will end up with no refund, or a smaller one, compared with a year ago, before the lower rates fully took effect. How could that be? The explanation rests with the many other changes that made it into the revised tax code. Some Americans are venting their surprise and anger.

The overhaul pushed through by President Donald Trump’s fellow Republicans in Congress did much more than lower rates for individuals and companies. It also eliminated some valuable tax breaks used by taxpayers to trim their bills, enhanced a tax credit bestowed on families with children and created brand-new benefits for certain taxpayers, such as business owners. Many people who live in high tax states, such as New York, New Jersey and California, will be able to write off only a fraction of what they pay in state and local taxes. Someone who travels frequently for work, but doesn’t have mileage covered, could owe more in taxes because there’s no longer a deduction for non-reimbursed business expenses. Everything considered, though, a clear majority of Americans -- four out of five, according to the nonpartisan Tax Policy Center in Washington -- were supposed to see a reduction in taxes.