GRAND RAPIDS, Mich. — Recent IRS Statistics
• IRS filing season began on Monday, January 28.
• The IRS issued statistics comparing the first five days of 2019 and 2018 (as of 2/1/2019 and 2/2/2018).
- Average 2019 refund was $1,865.
- Average 2018 refund was $2,035
What Might Cause Refunds to Decline?
• A refund (or balance due) is the result of reconciling your total tax bill with payments.
- Taxes withheld from paychecks
- Quarterly estimated payments
- Overpayments applied from your 2017 tax return
• The Tax Cuts and Jobs Act (TCJA) enacted the biggest change in federal tax law in over 30 years!
• The IRS adjusted withholding tables early in 2018.
• Many moving pieces affect your ultimate refund or balance owed.
Should You Worry?
• Your total tax bill is the most important consideration.
• Your overall tax bill might be lower for 2018 even if your refund is smaller (or if you owe).
• Your refund or balance due is really just the result of “settling up” with the United States Treasury.
• Remember that these IRS statistics only reflect the initial five days of the filing season.
• Similar statistics posted in February 2018 reported a 2.1% increase compared to early 2017.
• It is arguably healthier to focus on the bigger, long-term picture.
What Can You Do?
• Prepare (but maybe not necessarily file) your return sooner than later.
- IRS statistics revealed that filings decreased roughly 12% from the initial period in 2019 versus 2018.
- Early preparation of your return gives you increased time to make adjustments.
• Should you wait to actually file your return?
- Recent tax law changes mean some specialized forms are not yet 100% approved for IRS e-filing.
- There are a few expired tax provisions that may be retroactively resurrected by Congress.
- You may not need or want to pay a balance due until April 15.
• File a revised Form W-4 with your employer(s) if necessary.
• Adjust your quarterly tax payments if needed.
• Keep an eye on your tax situation throughout 2019.
Courtesy: Chris Harper, GVSU & Hungerford Nichols