Tax expert explains why returns seem lower this year

When you file your taxes this year, you may see a drop in the amount of money you get back as a refund or find that you owe money.

After overhauling the tax code at the end of 2017, Americans are now starting to see the impact. The IRS changed how much it withholds from your salary, and it also changed what you can deduct.

February is a busy month for tax preparers, and accountants said this is when most people file who expect to get refunds. But the amount is likely changing. Tampa tax preparer Darryl Madison said he already filed taxes for hundreds of locals.

"What I'm seeing is that there's a reduction in refunds across the board if you're making more than $50,000 a year," said Madison, who owns Madison Tax Service.

The IRS said refunds are down about 8 percent for people who filed last month ending on Feb. 1. The biggest reason why Madison's clients are seeing less money refunded is a change to itemized deductions.

"If you're a fireman, you can't write off your dues. You can't write off your travel expenses," Madison said.  "If you're a nurse, (it's) your uniforms. If you're a teacher, your supplies that you put out for your kids, those deductions are gone."

You can add charitable donations to that list. The amount needed to reduce your tax bill doubling for standard deduction has roughly doubled for everyone.

"I'm on the Salvation Army advisory board, and I know it's going to cut back on what some people do donate. And instead of just donating, they are going to just discard it," said tax filer John Clemons, who added that he doesn't expect to receive much of a refund.

If you run a business from home, Madison said you can help yourself by creating an LLC for your business expenses.

"It separates their personal from their business. If you're a business person and you're working from home and you have to pay money for your tolls, your fuel, that should all be coming out of your business account," said Madison.

Tax preparers said people are paying fewer taxes. The tax overhaul changed how much money is withheld from your paycheck every pay period. But your refund is different, and those filing their taxes hope the changes work in their favor.

"I do have to pay, unfortunately. I'm hoping this year it's not as much, so we'll see," said tax filer Olga Gomez.

The deadline to file your 2018 tax return is April 15.