Confusion over state tax withholding perplexing
Has tax law become so difficult to understand that the people in charge of it donít even understand it?
We ask because the director of the agency responsible of collecting Missouriís tax seems confused.
Department of Revenue Director Joel Walters told the House Budget Committee in January that the state noticed a 15-year-old error in its withholding formula when the federal tax changed.
On Wednesday, he said that there was no error, that new State Treasurer Scott Fitzpatrick explained to him it didnít exist. Walters said he ordered changes to the tables that he believed would reduce the impact of taxpayers withholding too much.
ďI was trying to do the right thing and I was trying to make the calculation more accurate,Ē Walters said.
Tell that to taxpayers who are seeing big changes in their taxes. The state says the average refund is down $78 and the average tax due is up $65. It adds that families earning $60,000 or less are getting hurt more than those making $100,000.
Walters, who was paid $128,244 in 2018, says the federal tax changes are the problem. About this time last year, Public Law 115-97, known as the Tax Cuts and Jobs Act, kicked in as Congress doubled the standard deduction and eliminated the personal exemption. That changed how Missouri collected taxes.
Taxpayers who claimed fewer dependents in the past didnít owe the state money but changes in the withholding tables changed that strategy.
Walters says his agency warned taxpayers of the change and urges everyone to check their state withholding and estimated payments and adjust them if needed.
Thatís not so easy to do, even physicist Albert Einstein said, ďThe hardest thing in the world to understand is income tax.Ē
In the Show-Me State, taxes seem more perplexing this year.
ó Daily American Republic