In the early weeks of this year’s tax season, the IRS issued fewer tax refunds when compared with the same period last year.
According to data from the IRS, the average refund amount as of Feb. 7 was $1,952 – up 0.2 percent (or $3) when compared with 2019. The number of refunds issued, however, was down 4.8 percent, as the tax agency doled out 4.6 percent less cash.
That could indicate that people aiming for a refund did not have enough taxes withheld from their paychecks throughout the year.
The tax agency had received more than 28.6 million returns, which is about on par with the same period last year.
A higher percentage of early filers this season self-prepared their returns, with those filings up 3.5 percent.
Last year’s tax season – the first filing under the Tax Cuts and Jobs Act – kicked off amid much chaos and confusion over the size of refund checks. Many people were taken back when they received little or no refunds despite having a similar financial situation to the year prior. Some even owed the tax agency for the first time.
In the end, the average refund last tax season was about $2,725, as the IRS doled out about 95.7 million checks. It processed about 130.7 million returns as of April.
As previously reported by FOX Business, whether checks will be bigger this year ultimately depends on the actions people took – or didn’t take – since last April.
Taxpayers encountered problems last year because of their failure to check their withholding amounts.
However, unless you filled out a new form, your current Form W-4 is still being used. That means any surprises could be exacerbated this year unless you adjusted your withholding to change how much you paid in taxes throughout the year.
While many people look forward to receiving a tax refund each year, the ultimate goal of proper withholding is to pay so much each month that you neither owe nor are owed come April.
But if you are expecting a refund this year, according to the IRS, most refunds are issued in less than 21 calendar days if filed electronically. For those who mail in a paper return, the turnaround is slower – about six weeks.