The tax season appeared to be off to a slow start when it opened last month, with initial statistics showing fewer returns filed and smaller refunds issued. While the numbers from the Internal Revenue Service (IRS) were down, expectations were still high. However, a few weeks later, the data is again raising eyebrows: across the board, fewer taxpayers have filed tax returns and refund numbers remain underwhelming.
Tax season opened on January 28, 2019. Three weeks into the season (week ending February 15, 2019), the IRS has received 39,747,000 individual income tax returns. That compares with 41,738,000 individual income tax returns received by the same time last year, a drop of nearly 5%.
The IRS also reported a drop in the rate that individual income tax returns were processed. The IRS has processed 37,810,000 returns to date, or nearly 7% fewer returns compared with the same time last year.
And what about those tax refunds? Tax refund numbers were initially sluggish, but most taxpayers expected those numbers to pick up as the tax filing season progressed. So far, that’s not the case.
The IRS has issued just 23,485,000 tax refunds as compared to 31,937,000 for the same period last year. That’s a drop of 26.5% – a bigger drop than at the start of the season. The total amount of tax refunds issued is just $61.993 billion, nearly $40 billion (yes, 4-0, not a typo) off of the pace from last year. That’s a drop of almost 40%.
The math works out to smaller average refunds for taxpayers, too: $2,640 per taxpayer compared to $3,169 for the same period last year, a drop of just under 17%.
And because I know you’re wondering: yes, refund numbers tend to be smaller very early in the season. That’s because, by law, the IRS can’t issue refunds to taxpayers who claimed the earned-income tax credit (EITC) or the additional child tax credit (ACTC) – both of which tend to produce bigger checks – until February 15. However, that law was in effect last year, too, which means that stats are comparable.
It’s not just the filing and refund numbers that are down. Taxpayers aren’t flocking to the IRS website as much as they did in 2018. So far this year, taxpayers visited irs.gov 161,706,000 times, a 3.3% dip from last year, despite a push by IRS to encourage taxpayers to go online instead of picking up the phone.
There’s only one number that has moved the needle higher in 2019: the number of self-prepared tax returns which were e-filed. Professionally prepared e-filed tax returns fell by 8.5%, but self-prepared e-filed returns weighed in at 21,774,000, reflecting a .1% increase (okay, it’s tiny, but it’s still positive).
Of course, it’s still early in the tax season which means that you can’t draw too many conclusions based on the data. With two months to go, those numbers could start ticking upwards. What is clear, however, is that taxpayers aren’t rushing to file their returns.