Average tax refund down 17 percent, IRS reports

[riversedge]

Source: Politico



Updated 02/22/2019 10:25 PM EST

The average tax refund issued so far this year is down by 17 percent, the IRS said, a steep decline that promises more headaches for Republican lawmakers.

The agency released data late Friday showing refunds are down for the third consecutive week, with the typical payment made through Feb. 15 totaling $2,703, compared to $3,256 during the same period last year.

This filing season is the first under Republicans’ overhaul of the tax code, and lawmakers have already been under fire as some taxpayers find their expected refunds smaller or gone altogether. The payments are sacrosanct to many Americans who rely on them to fill holes in their budgets.

The administration blamed the decline on what it said was a quirk in year-over-year comparisons.

The agency typically issues a large amount of payments in February to people claiming they earned income tax credit, a wage supplement program for the working poor, as well as a tax credit for having children. That has skewed comparisons, a Treasury Department spokesperson said, because last year’s batch of data happened to include more of those payments than does this year’s..............................

Read more: https://www.politico.com/story/2019/02/22/irs-tax-refunds-2019-1207283

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about a month ago, refunds were down 8%.

[samnsara]

1. ours was down 30% but we still got a chunk back...

...unable to deduct sux

[DirtEdonE]

2. Are we great again yet?

Yes but only for a very, very few.

[George II]

3. Unfortunately people are concentrating on their tax refund, not their overall tax liability:

If someone's final tax liability was $5000 tax last year and got a $1000 refund, they're still paying $5000.

It's the TAX that people are ignoring. My TAX went up by about $4000 this year, and state tax (based on Federal criteria) went up about $700. My "refund" is irrelevant to my net tax liability.

[Recursion]

4. I'm lucky enough to be in a financial position where I can take that kind of long view

My tax liability per se went down slightly, and I knew in advance I'd be writing a check to the IRS so I could save up money.

People who are less lucky than me don't have the luxury of taking that long view, can't realistically save up to write that check, and in many cases depend on getting a check back.

[George II]

7. I used to do that when I was working, I'd get my employer to take out more than necessary....

...that way I was assured of not getting caught short at the end of the year.

Sadly the average American doesn't understand the difference between taxes owed and tax refund.

[Sgent]

11. Keep in mind

that a large number of those filing in Feb (vs Apr) are eligible for the earned income credit and other refundable credits. Their tax liability may actually be negative; however, this bill didn't increase refundable credits so its a net regressive tax cut.

[Adrahil]

13. We'll see...

I suspect that a chunk are paying more.

[fascisthunter]

5. It's as if we were on a life raft with suicidal idiots

"Fuck it, I don't like the people I'm surrounded by so we are all going down!"- Trump Supporter

"Oh no you don't! We're throwing your asses out; say hello to the to the sharks, dumbasses!" - Normal Americans

[lark]

6. Dems can really use this to their advantage, if they dare.

If I were a candidate, I'd start with drumpf promising tax cuts for workers and raises for rich, show him saying this multiple times. Then point out the truth, 83% of the benefits to go millionaires and above. Show how much millionaires have saved and how much workers taxes have increased. Also show how much Donald Trump (probably) saved himself. Promises not kept for every day Americans. Show him saying he'll follow his generals advice, then Mattis leaving over Syria. Show him in charge of all branches of the government and still unable to build his wall without illegal measures currently being stopped by courts (I'm sure that will happen).

Of course I'd also run ads showing how he favors every rapist, how many times he's been charged with assault and settled out of court, how many times he's been sued for fraud then goes out and hires other frauds - see Pruitt. How many times he's praised KKK & Nazis, kidnapping, drugging, torturing, caging, stealing brown children from their parents and keeping no records. How he doesn't mention a MAGAT would be mass killer of Democrats but goes on and on about any brown skinned murders.

Then I'd do another spot about lying and Russia and point out the extreme lengths he's implemented to avoid even the start of any sanctions and the lies about Deripaska so he could pay him back for election theft by buying his steel, which should be illegal. Show how all of his underlings were lying about Russia and that Kusher and Eric also lied about Russia and all the actions he;s personally taken to benefit Russia. Ask why this is?

Anyway just my 2 cents

[Achilleaze]

8. republicans have pissed on American taxpayers. Again.

with their evil republican Tax Cuts for the Rich bullshit.

Deplorable (R).

[exboyfil]

9. I took a standard deduction before

and my youngest started working as a nurse last year. The tax bill actually has been good for me.

On the other hand the $1.2T deficit and $22T debt are an abomination. I should be paying more taxes, and the wealth class really should be paying more taxes.

We also should be doing a much better job with the money we are spending. Such prudence crosses both aisles.

[cstanleytech]

14. For the Repugants the debt only matters when they are not in power.

[groundloop]

10. Hell, my refund is well into negative territory this year.

I owe over $1K this year, the first time ever I haven't gotten a refund. Even worse, my total tax has also increased.... I've already unloaded on my repub congress critters. Hell, when I mail my check to the IRS on April 15th I'll probably be pissed off enough to send another salvo of emails and phone calls to the repubs who claim to represent me.

[Bradical79]

12. Mine is down about 30%

Though I havn't examined why exactly. With tax cuts, I'd think this should be expected, though I don't know by what %.

[workinclasszero]

15. Enjoy your god emperor Trump voters

[Cold War Spook]

16. Tax refund is meaningless.

Total federal income tax is meaningful.

[athena]

26. Many people rely on their refund

to boost their emergency savings. Most people are not good at personal finance. For most people, $30 a month extra goes unnoticed, but $360 in February or March is a significant addition to their savings account.

Moreover, if you live in a state that has high property taxes, your total federal income tax is likely to have gone up significantly. See:
https://money.usnews.com/money/personal-finance/taxes/articles/2018-09-28/will-your-taxes-increase-under-the-new-tax-code

[Cold War Spook]

27. I should have written a better post.

By meaningless I meant it does not tell whether or not you are paying more or less federal income tax.

[lagomorph777]

30. It's not politically meaningless.

The Richpublicans are going to pay for this (after WE do, of course).

Most Americans are going to perceive they have suffered a tax hike, mainly based on losing most or all of their refund.

A huge number of those Americans have suffered a real tax hike. Those of us with mortgages, or living in states that don't run like 3rd-world countries, are paying higher taxes. Of course, by "us" I mean normal people, not billionaires.

The tax bill, at best, didn't help the Richpublicans in 2018. But in 2020, it will be the death of the party. Their inability to think more than 10 minutes ahead has done them in this time.

[keithbvadu2]

17. What is the % of those who owe that did not owe last year? That's a real disappointment.

[lagomorph777]

31. You may be disappointed, but it's hardly a surprise. The bill was obviously intended to hurt people

I immediately raised my witholding to reduce the tax-time shock; I haven't done my taxes yet so am still anxious about how bad it will be. I live in a non 3rd-world state (i.e. we pay state income taxes here) so I expect a pretty bad Federal tax hike this year.

[dugog55]

18. The Tax Reform Bill

was set up to take less taxes out for the same deductions on your W-4 to make it look like you are benefiting from the Tax Bill. But, if you were one to cut it close for little to no refund, you will end up paying taxes. If you received a large return annually it will be smaller this year. And for some people that itemized deductions before, there is now a cap on how much you can deduct for mortgage interest and State/Local taxes. Those people will actually be paying a larger tax burden.

What will not happen though, the wealthy and corporations will be getting much more money back and paying a lesser percentage in taxes. This is the third time Republicans have pulled this scam on the public. When will some voters wise up. Certainly their one policy voting stance cannot be more important than feeding their family.

[stopwastingmymoney]

19. Interesting thing

I'm a small biz management type accountant and don't usually prepare tax returns but I had a friend come to me for help as he had not filed in 2017. So I had the opportunity to see his 2017 and 2018 W2s side by side. He was at the same job, allowances the same etc. The income increased by about 5% and withholding was 20% less!!


I'm still in process so I can't tell you the final result but that withholding difference alone is interesting.

In my companies where I do payroll, I've had just one employee so far complaining about withholding, I expect there will be more.

[DeminPennswoods]

21. Set my withholding back to pre-tax cut levels

but that wasn't enough this year. I do believe another reason for lower refunds is that for people who are able to save and invest, mutual funds seem to have paid out a lot of capital gains due to the stock market setting new highs for most of 2018. Presumably, the funds sold high thus producing more capital gains than usual.

[stopwastingmymoney]

24. I don't know

I think the portion of people investing outside of IRAs is pretty small and they’re also not the ones who expect refunds.

[Squinch]

20. As you say, last month that number was 8%. I wonder if next month the average will go up again.

[GatoGordo]

22. More money for the Federal government to increase spending on vital programs

Making lemonade of of lemons.

[modrepub]

23. 2nd Quarter GDP

Will be interesting to see how lower refunds will impact sales. Lots of people use refunds for big ticket purchases or vacations. Expect fewer refunds to put a slight dent in that this year.

Did our taxes a couple of weekends ago. We owed a little more than last year but both of us adjusted our withholding and did so again this year and I upped my 403b withholding. Hoping next year comes back closer to even.

[ck4829]

25. Kick

[MichMan]

28. The house should pass legislation requiring higher withholding

That way voters will be happy getting higher refunds.


Focusing on refunds rather than the taxes paid is stupid IMO

[Puzzledtraveller]

29. Mine was unchanged

as a state caseworker, and a family of three, I have a salary of 27k a year as a SNAP and Medicaid caseworker, my wife self employment brings in about $600, we claim my stepson every other year, but was just the three of us, wife, daughter and myself this year. I pay no federal income tax, even when I lowered my exemptions, and of course we get the child tax credit, etc, state always gets us though, but not by much. I am actually hoping I do not get the raise I have coming because right now we all receive Medicaid which is our secondary, my state employees health insurance is primary, and we have a little girl due in April so I will get us SNAP as well. Since it's what I do for a living I know exactly were our income needs to be keep eligible. We live comfortably and are happy with our rented townhome.

[melm00se]

32. My tax liability

is down $3500 from last year and my income is flat year over year.

My tax refund is approximately the same.