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IRS Reports Tax refunds down $4.4B for 2018 Tax Filings

IRS Reports Tax refunds down $4.4B for 2018 Tax Filings

The Internal Revenue Service reported a $4.4 billion decline in total tax refunds as of April 19, the first tax season under the Tax Cuts and Jobs Act, with the average size of tax refunds down about 2 percent.

The total number of tax refunds increased slightly, from 95,434,000 to 95,737,000, a 0.3 percent increase. The total amount of tax refunds declined 1.7 percent, though, from $265.326 billion to $260.919 billion.

The average amount of the refund also dipped 2.0 percent, from $2,780 to $2,725.


At the same time, the Tax Cuts and Jobs Act also eliminated the personal and dependent exemptions. The IRS recommended last year that taxpayers adjust their withholdings with a "paycheck checkup" using its online withholding calculator to avoid withholding too little this year. Nevertheless, relatively few taxpayers actually

The 2017 tax overhaul eliminated or sharply limited a host of tax deductions, including widely used ones like the state and local tax deduction. Taxpayers can write off only $10,000 in state and local taxes from their federal taxes now. That provision has been attacked by lawmakers in so-called "blue states" that traditionally vote for Democrats. In exchange, the tax law doubled the size of the standard deduction and lowered tax rates overall, prompting more taxpayers to skip itemizing this year.  

2019 FILING SEASON STATISTICS

Cumulative statistics comparing 4/20/2018 and 4/19/2019
 

Individual Income Tax Returns:   

2018

2019

% Change

Total Returns Received  136,919,000 137,233,000 0.2
Total Returns Processed   130,477,000 130,775,000 0.2
       

E-filing Receipts:

     
TOTAL              124,515,000 126,264,000 1.4
Tax Professionals  70,983,000 70,476,000 -0.7
Self-prepared   53,532,000 55,788,000 4.2
       

Web Usage:

     
Visits to IRS.gov  386,895,000 421,514,000 8.9
       

Total Refunds:

     
Number  95,434,000 95,737,000 0.3
Amount  $265.326 Billion  $260.919 Billion -1.7
Average refund  $2,780 $2,725 -2.0
       

Direct Deposit Refunds: 

     
Number  80,491,000 83,249,000 3.4
Amount  $236.851 Billion  $238.381 Billion  0.6
Average refund  $2,943 $2,863 -2.7


The vast majority of taxpayers saw their taxes reduced over the course of last year, but many of them didn't notice the difference in their paychecks. The IRS faced complaints from many taxpayers who ended up owing far more money than they expected or getting a lower tax refund than anticipated. In response, the IRS lowered the threshold for imposing tax penalties on taxpayers who underwithheld or paid too little in estimated taxes last year. The IRS is again urging taxpayers to check their withholdings now that tax season is over.

However, the IRS is also planning to roll out a newly revised Form W-4 next month that will again require many taxpayers to adjust their withholdings. They will likely need to get help from tax professionals because it is expected to be even more complicated to use than last year's form. An early draft of the form provoked complaints last year from accounting and tax professional groups because it asked for much more information than usual about outside sources of income from spouses and others.

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Sources:
IRS
accountingTODAY
 

Read more at: Tax Times blog

 
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