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