Early indicators are showing that tax refunds appear to be on a downswing this year. Compared to the same week last season, tax refunds this year are being reported down by approximately 8.4 percent. According to date released by the IRS (Internal Revenue Service), to this date, the average refund received by taxpayers has been roughly $1,865 compared to $2,035 just the year before.
The report of reduced refunds is causing taxpayers to become upset, as well stunned, blaming the Trump administration's new tax law as well as the recent government shutdown. The low-income segment of residents is more likely to file their taxes early, to receive their refunds much faster.
These refunds are reported to crucial as they are needed for a variety of reasons, such as catching up payments on bills, making some much-needed home or automobile repairs, taking a vacation or even purchasing a new car or home.
According to Bloomberg, the IRS stated they are expecting to process and issue an estimated 2.3% fewer refunds for 2018. They have also ted that the downtick in returns is indeed due to the changes in the federal tax law.
A report by MSNBC stated that a large number of taxpayers will, in fact, owe the government this year, to the tune of 30 million individuals. This estimated amount is significantly higher by 3 million more compared to before Trump's tax law.
In an interview with the Politico, Edward Karl with the American Institute of CPA’s stated: “There are going to be a lot of unhappy people over the next month. Taxpayers want a large refund.” Karl referenced the fact that later year, an estimated 71% of taxpayers actually received a refund, many averaging out at about $3,000.
Many upset and enraged taxpayers are taking to Twitter to sound off about the fact that last tax season they received a refund. However this season they are having to pay the IRS instead. The IRS has stated that the number of total returns that have actually been processed and sent out is also down, by 24%, as they are still struggling to get caught up on them after the monkey wrench that was thrown into the processing schedule caused by the recent government shutdown.
The agency has stated that by the end of the week of February 1st, they were able to send out 4.67 million refunds to those residents that had been waiting.
So, what’s the verdict—you decide.
Will the new tax laws actually prevent even more taxpayers from seeing a return?