Taxpayers are accustomed to receiving big refunds after filing, but experts warn that with new laws more people could end up owing the IRS. Veuer’s Justin Kircher has the details.
Tax refunds are still coming in smaller versus last year after the second full week of filing season, the Internal Revenue Service reported on Thursday. Tax pros say lower paycheck withholdings during the year is the likely reason.
The average tax refund issued so far dropped to $1,949, down 8.7 percent from $2,135 at the same time last year, according to IRS statistics. Last week, the agency reported that refunds were off by 8.4 percent compared with 2018 after the first week of filing.
So far, the agency has processed almost 27 million returns, about 10.2 percent less than last year at this time. It also received 6.9 percent fewer returns from taxpayers overall.
The IRS began accepting returns on Jan. 28. Most taxpayers have until April 15 to file their returns. Residents of Maine, Massachusetts and Washington, D.C., have until April 17 because of local holidays.
Tax experts said refunds could be smaller for people who didn’t adjust their paycheck withholdings after the new tax law changes last year. In some cases, taxpayers who got refunds in past years may end up owing the government instead.
These outcomes don’t mean Americans are paying more in total taxes for the year. In many cases, the tax savings showed up in each paycheck during the year.
Just because it’s tax time doesn’t mean there’s a bumpy road ahead. Buzz60’s Sean Dowling has more.
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