After a slow start to the tax filing season, it looks like taxpayers might be getting some good news! The IRS released numbers earlier in February that showed fewer tax returns filed, fewer tax refunds issued and a decrease in the amount of each tax refund. While numbers are still low for people who are filing their taxes, the IRS says that the average tax refund has increased.
Over a month into tax season and the IRS has received nearly 50 million individual income tax returns, whereas this time last year, the IRS had received nearly 52 million tax returns. This 4% could be due to several factors including the government shutdown and the recent tax reform. Along with drop-in tax returns filed, there has also been a 5% drop in tax returns that have been processed by the IRS.
While tax refunds have rebounded a bit from earlier in the tax season, the numbers are still lower compared to those from last year. The IRS has issued just over 38.5 million tax returns this year compared to the 40.5 million issued for the same period last year. That’s a 5% drop which is still a lot better than the 26% difference from earlier in the filing season.
The good news is that while the number of overall refunds is down, the average refund has increased! The average refund is up $40 averaging around $3,143 per taxpayer. This could be due to the issuing of tax refunds that include the Earned Income Tax Credit or the Additional Child Tax Credit. The IRS cannot issue refunds to taxpayers who claimed those tax credits before February 15th.