For those receiving tax refunds after the major tax overhaul, the results could be disappointing. So far, the IRS reports that tax refunds are about 8% smaller so far this year than they were this time last year. The shortfall adds up to an average of $170 for Americans receiving tax refunds so far.
Unless the GOP and Democrats reach a funding deal this week, a second government shutdown could delay much-needed tax refunds for many Americans.
According to Wall Street, no one, including civil servants, elected officials, and economists have a thorough understanding of exactly how tax reform will affect the amount of money Americans should expect in their tax refunds.
The smaller refunds don’t necessarily point to a tax increase. When the federal government sets the worth of each allowance, they attempt to reconcile that amount with total tax liability. Shrinking refunds could simply indicate better accuracy with allowance value.
This year’s average refund so far is $1,865, which is an 8.4% decrease from last year’s $2,035 average refund amount. The total number of refunds filed to date lag behind last year’s numbers by 12.4%.
Taxpayers who had their paperwork in order were able to file their taxes as early as January 28 this year.