One year ago, Congress overhauled the tax code and now early federal tax filers have found tax refunds to be on average 8 percent lower.
So far, refunds for the 2018 tax refund year are averaging $1,865 as compared to $2,035 in the 2017 tax year, according to IRS tax data. Tax experts anticipated the smaller refunds because many did not adjust their withholdings after the tax code changes took effect. The total number of tax returns received is also less the first week of the season from about 18 million in 2018 to some 16 million so far in 2019.
The new rule lowered most individual rates and nearly doubled the standard deduction. Some workers may have noticed a bump in their tax home pay in 2018 after employers started using the new IRS income tax withholding tables. However, accounting experts are saying if you did not adjust your paycheck withholdings after the changes took effect, you will most likely see a dip in your refund.
Filing season opened just days after the end of the longest government shutdown in U.S. history, however in a statement made by Treasury Secretary Steven Mnuchin, “The Treasury and IRS employees are working diligently to ensure the system is processing these returns efficiently.”
For more information visit www.irs.gov.
Have you noticed a change in your refund this year? Tell us what you think.
Sources: irg.gov, H&R Block