For early filers of their 2019 taxes, the average refund was down nearly 11% from the year before, according to the latest data from the Internal Revenue Service.
The average refund for early filers this year was $2,869, down from $3,227 for the same period last year. The number of returns that received a refund also declined by 8.4%.
The decrease in refunds is not unexpected, as the Tax Cuts and Jobs Act of 2017 changed the way taxes are calculated. The new law reduced the number of deductions and exemptions that taxpayers can claim, which could lead to smaller refunds for some people.
The decrease in refunds is also due to the fact that the IRS is taking longer to process returns. The agency has been dealing with a backlog of returns due to the government shutdown in late 2018, as well as changes to the tax code.
The decrease in refunds is likely to have an impact on consumer spending. Many taxpayers use their refunds to pay down debt or make large purchases. With refunds down, these consumers are likely to be more conservative with their spending.
For those who are expecting a refund, the best advice is to file as early as possible. The sooner you file, the sooner you will get your refund. Additionally, be sure to double-check your return for any errors or mistakes, as these can delay your refund.
Overall, the decrease in average refunds is not good news for taxpayers. However, it is important to remember that the new tax law could still save you money in the long run, even if your refund is smaller this year.