Posted on 04/08/2019 2:25:32 PM PDT by CaptainK
Individual tax refunds this year have been only slightly smaller than last year, but those shortfalls are adding up. At the end of last month, the amount of money the government refunded was $6 billion below this time last year, according to IRS figures.
As of March 29, the Treasury had issued 71.8 million refunds. This time a year ago it had issued 73.4 million. So while the average refund, at $2,873, is only $20 less than it was last year, about 1.6 million fewer people are getting refunds, the IRS said.
That shrinking pot of money is showing up in surprising ways, including through lower retail sales. Many families use refunds as a forced saving mechanism, as their IRS refund is often largest single check they receive all year. In the weeks after receiving a refund, families tend to splurge on large purchases such as furniture or appliances; credit-card payments and travel, a JPMorgan Chase study found.
Lower refunds don't mean Americans paid more taxes—quite the opposite. Most workers paid less in taxes last year and saw higher take-home pay week in and week out. But for many Americans, a slightly higher paycheck doesn't quite have the same visibility as a single $3,000 check in March or April.
"I think people are busy, maybe they get direct deposit, they're not paying attention and they feel like they have so much in taxes coming out anyway ... they don't necessarily notice a difference in the net pay. Especially if it's spread out over 26 pay periods," said Steven Zelin, a CPA based in New York.
With another two weeks left to file taxes, the general trend could shift. But it's unlikely that average refunds will go up, tax pros say. That's because the people who tend to file their taxes later in the season are the ones who know they owe money.
"Generally speaking, folks who expect a refund will file early, but folks who expect to pay file late," said Ivan Havrylyan, a Chicago financial planner.
Half way through the article it is finally explained that lower refunds doesn't mean you paid higher taxes.
What’s a refund?
Money sent to taxpayers not taking advantage of federal interest free loans.
I had more “income” exposed to Fedzilla taxation in 2018 than in 2017, but paid less total Federal income tax.
Simple math. Withholding was lowered. God I hate the media.
Just wait for the Deluge of 1040-V checks in the next week.
If you want to loan the government interest free money, simply ask your employer to rate you with 0 exemptions or withhold an additional $ xyz from every paycheck. Then you get a bigger refund.
I’m one of those who always owes at the end of the year. My experience with Trump’s tax cuts is good. I made more last year then the year before, I also get bonus. I paid less out of each check, even though I was making more. And at the end of the year, I owed about half of what I did the year before. I’d say I paid about $7k less under the new tax plan.
I don’t care what the final figures are. I only know that I am spending a lot of time trying to learn all the ins and outs of the revised tax forms. For the very simple tax it might not be a problem, but if you have Schedules C, E, F or investment income even if it is only a few hundred dollars, it is a real pain.
Did the government lower it? Why?
Ours was WAY down (our refund)- because we had practically no withholding, so we were “starving the beast” for this past year, instead of them having interest-free use of our money.
Abolish the Victory Tax, Stop Mandatory Withholding and there will be a Revolution Overnight!!
When Everyone gets to Personally write a Check to the IRS,$40K in my case, then the Revolution can begin.
Good, that means fewer no-interest loans were given to the Government.
“But for many Americans, a slightly higher paycheck doesn’t quite have the same visibility as a single $3,000 check in March or April.”
... which makes an argument for no withholding at all.
-PJ
CBS = Concentrated Bull $hit
Which is EXACTLY what the govt wants. They do NOT want you to pay attention. They want you to be a good little lemming and not complain. When the money is removed from your check at the payroll window and you never see it, it's like it never happened.
If people had to write a check to the government every month to pay their taxes the tax revolt in this nation would be of epic proportions.
At least we have a reason. We sold our CA house we owned for many years, plus had deferred capital gains on the house we owned prior to that. Our reward for bolting out of CA was some taxable capital gains on our house sale (beyond the $500k exemption), both federally and for CA.
So there was less theft by government and people got to keep their money in the first place. Winning!!!
JoMa
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