Counting on a Tax Refund in 2020? Here's Why That May Not Happen.

Each year, millions of Americans eagerly await a tax refund upon submitting their returns to the IRS. And while it's easy to argue that tax refunds are not, in fact, a good thing, since they effectively mean you gave the government a tax-free loan during the year, many people appreciate getting to collect that lump sum payment. But in 2019, many tax filers were disappointed with their lower refunds, or absent refunds. And in 2020, many are likely to experience a repeat letdown.

The reason? Americans aren't taking steps to update their tax withholding, and it's changing their outcomes when they file their returns.

The U.S. has a pay-as-you-go tax system, which explains why taxes are withheld from your paycheck week after week. The amount of tax that gets withheld, however, is based on the number of allowances you claim on your W-4. The more you claim, the more money you get directly.

Continue reading

Source Fool.com