Here's how big tax refunds could be this year for people earning between $21,000 and $266,000

millennials laughing socialVivien Killilea/Getty Images for Fast Company

  • It's the first tax season under the new tax law President Donald Trump enacted in late 2017.
  • While a majority of Americans saw a decrease in their overall tax bill for 2018, many complained about smaller refunds during the first few weeks of the tax-filing season.
  • A tax refund means you had too much withheld from your paycheck for taxes. The amount withheld is determined by the number of allowances you claim.
  • Business Insider calculated federal tax refund amounts for different income levels for a single person with no dependents who claims zero allowances.
  • The IRS withholding calculator recommends the typical person in this situation claim two allowances. Doing so would minimize their tax refund while still covering their tax liability.

Americans love tax refunds - they're a form of forced savings and often act as a reset button for a family's finances.

After weeks of worry about smaller tax refunds, the average refund size by mid-March was up to about $3,000 - nearly the same as this time last year, according to IRS data.

But with the passage of President Donald Trump's tax law, some Americans may be receiving smaller refunds than previous years, but it doesn't mean their taxes went up. In fact, the majority of Americans received a tax cut, Business Insider's Bob Bryan reported.

The tax law instituted new guidelines for how much employers should withhold from employees' paychecks for taxes. The amount withheld is determined by the number of allowances the taxpayer claims, which can be adjusted at any time throughout the year.

"Depending on a filer's tax situation, they may not get as large of a refund this year as they're used to if they didn't adjust their withholdings in 2018. That said, they shouldn't immediately be alarmed if that's the case," Mark Jaeger, the director of tax development at TaxAct, told Business Insider.

"Just because you receive a small refund doesn't mean you didn't get everything back you were owed or that you're worse off financially - it most likely means you paid the right amount of federal taxes you owed during the year and didn't overpay," Jaeger said.

The government recommends a single person with no dependents and one job claim two allowances to get as close as possible to covering their tax liability. That person will also take home a bigger paycheck throughout the year than if they claimed one or zero allowances, allowing them to potentially save and invest more.

Read more: How to use H&R Block to file your taxes for free

"Many filers received a boost in their paychecks throughout 2018; that's where the remaining amount of their refund went," Jaeger said. "Instead of waiting to receive their money as a tax refund, they received it all year long."

How we calculated tax refund sizes

To find out how workers fared, we calculated federal tax refund amounts for different income levels based on the following assumptions: A single filer who makes a 10% pretax retirement contribution (up to the 2018 maximum $18,500), takes the standard deduction ($12,000), and claims zero federal withholding allowances.

A person who claims zero allowances will have more money withheld from every paycheck, but likely end up with a tax refund when filing their tax return. "Some individuals like receiving a larger refund because they use it as a savings account," Jaeger said. "It's a way for them to save a significant chunk of money throughout the year."

Below, here's how big tax refunds could be this year for workers at different income levels.

Personal Finance Insider offers tools and calculators to help you make smart decisions with your money. We do not give investment advice or encourage you to buy or sell stocks or other financial products. What you decide to do with your money is up to you. If you take action based on one of the recommendations listed in the calculator, we get a small share of the revenue from our commerce partners.

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$21,610: Fast-food cooks

$21,610: Fast-food cooks

Average salary: $21,610

Taxable income after 10% 401(k) contribution: $19,449

Federal income taxes due: $744.90

2018 refund: $954.90

Waiters and waitresses

Waiters and waitresses

Average salary: $25,280

Taxable income after 10% 401(k) contribution: $22,752

Federal income taxes due: $1,099.74

2018 refund: $996.42

$30,480: Barbers

$30,480: Barbers

Average salary: $30,480

Taxable income after 10% 401(k) contribution: $27,432

Federal income taxes due: $1,661.34

2018 refund: $996.42

$40,840: Travel agent

$40,840: Travel agent

Average salary: $40,840

Taxable income after 10% 401(k) contribution: $36,756

Federal income taxes due: $2,780.22

2018 refund: $996.42

$49,650: Chefs and head cooks

$49,650: Chefs and head cooks

Average salary: $49,650

Taxable income after 10% 401(k) contribution: $44,685

Federal income taxes due: $3,731.70

2018 refund: $1,225.32

$51,930: Firefighters

$51,930: Firefighters

Average salary: $51,930

Taxable income after 10% 401(k) contribution: $46,737

Federal income taxes due: $3,977.94

2018 refund: $1,430.52

$55,270: Commercial divers

$55,270: Commercial divers

Average salary: $55,270

Taxable income after 10% 401(k) contribution: $49,743

Federal income taxes due: $4,338.66

2018 refund: $1,731.12

$60,760: Librarians

$60,760: Librarians

Average salary: $60,760

Taxable income after 10% 401(k) contribution: $54,684

Federal income taxes due: $5,329.98

2018 refund: $1,826.82

$66,990: Insurance sales agents

$66,990: Insurance sales agents

Average salary: $66,990

Taxable income after 10% 401(k) contribution: $60,291

Federal income taxes due: $6,563.52

2018 refund: $1,826.82

$74,680: Dental hygienists

$74,680: Dental hygienists

Average salary: $74,680

Taxable income after 10% 401(k) contribution: $67,212

Federal income taxes due: $8,086.14

2018 refund: $1,826.82

$77,920: Accountants and auditors

$77,920: Accountants and auditors

Average salary: $77,920

Taxable income after 10% 401(k) contribution: $70,128

Federal income taxes due: $8,727.66

2018 refund: $1,826.82

$87,530: Computer programmers

$87,530: Computer programmers

Average salary: $87,530

Taxable income after 10% 401(k) contribution: $78,777

Federal income taxes due: $10,630.44

2018 refund: $1,826.82

$91,790: Civil engineer

$91,790: Civil engineer

Average salary: $91,790

Taxable income after 10% 401(k) contribution: $82,611

Federal income taxes due: $11,473.92

2018 refund: $1,826.82

$99,580: Electrical engineers

$99,580: Electrical engineers

Average salary: $99,580

Taxable income after 10% 401(k) contribution: $89,622

Federal income taxes due: $13,016.34

2018 refund: $1,895.34

$107,480: Nurse practitioners

$107,480: Nurse practitioners

Average salary: $107,480

Taxable income after 10% 401(k) contribution: $96,732

Federal income taxes due: $14,625.18

2018 refund: $1,992.90

$115,300: Aerospace engineers

$115,300: Aerospace engineers

Average salary: $115,300

Taxable income after 10% 401(k) contribution: $103,770

Federal income taxes due: $16,314.30

2018 refund: $1,992.90

$121,710: Pharmacists

$121,710: Pharmacists

Average salary: $121,710

Taxable income after 10% 401(k) contribution: $109,539

Federal income taxes due: $17,698.86

2018 refund: $1,992.90

$141,890: Lawyers

$141,890: Lawyers

Average salary: $141,890

Taxable income after 10% 401(k) contribution: $127,701

Federal income taxes due: $22,057.74

2018 refund: $1,992.90

$161,280: Airline pilots, copilots, and flight engineers

$161,280: Airline pilots, copilots, and flight engineers

Average salary: $161,280

Taxable income after 10% 401(k) contribution: $145,152

Federal income taxes due: $26,245.98

2018 refund: $1,992.90

$196,050: Chief executives

$196,050: Chief executives

Average salary: $196,050

Taxable income after 10% 401(k) contribution: $177,550

Federal income taxes due: $34,665.50

2018 refund: $2,657.22

$208,560: Family and general practitioners

$208,560: Family and general practitioners

Average salary: $208,560

Taxable income after 10% 401(k) contribution: $190,060

Federal income taxes due: $38,668.70

2018 refund: $2,657.22

$229,380: Orthodontists

$229,380: Orthodontists

Average salary: $229,380

Taxable income after 10% 401(k) contribution: $210,880

Federal income taxes due: $45,331.10

2018 refund: $2,872.62

$265,990: Anesthesiologists

$265,990: Anesthesiologists

Average salary: $265,990

Taxable income after 10% 401(k) contribution: $247,490

Federal income taxes due: $58,111

2018 refund: $2,906.22

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