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The Treasury Department and the Internal Revenue Service (IRS) have released state-by-state figures for Economic Impact Payments (EIPs). 

The ten states receiving the greatest number of payments to date are:

The ten states receiving the least number of payments to date are:

You can see the entire list on the IRS website

According to the IRS figures, nearly 88 million individuals have received stimulus payments worth almost $158 billion in the program’s first three weeks (as of April 17). That number is more than half of the 150 million payments expected to be distributed.

More payments are continuing to be delivered each week. Direct deposit checks have been making their way to accounts for a couple of weeks, and paper checks were mailed out this week.

“The IRS, Treasury and partner agencies are working non-stop to get these payments out in record time to Americans who need them,” said IRS Commissioner Chuck Rettig. “Tens of millions of people across the country are receiving these payments, and millions more are on the way. We encourage people to visit IRS.gov for the latest information, FAQs and updates on the payments.”

You should be eligible for a payment if you:

  • Are a U.S. citizen, permanent resident or qualifying resident alien;
  • Cannot be claimed as a dependent on someone else’s return;
  • Have a Social Security number (SSN) that is valid for employment (valid SSN); and
  • Have adjusted gross income (AGI) below an amount based on your filing status and the number of your qualifying children. Checks begin to phaseout for those earning more than $75,000 ($150,000 for joint returns and $112,500 for heads of household) and are subject to phaseouts.

 You are not eligible for a payment if you:

  • Can be claimed as a dependent on someone else’s return;
  • Do not have a valid Social Security number (a taxpayer with an individual taxpayer identification number (ITIN) does not qualify);
  • Are a nonresident alien;
  • Filed Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019; or
  • Have adjusted gross income (AGI) above the amount based on your filing status and the number of your qualifying children. 

Payments are automatic for people who filed a tax return in 2018 or 2019, receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, as well as Supplemental Security Income (SSI), and Veterans Affairs beneficiaries who didn’t file a tax return in the last two years.

If you have additional questions, you can visit the Taxpayer Advocate Service Coronavirus (COVID-19) Tax Updates webpage.

Taxpayers still aren’t rushing to file: that’s the initial takeaway from a second set of statistics released by the Internal Revenue Service (IRS). 

Tax season opened on time on January 27, 2020, one day earlier than in 2019. As of the end of the second full week of tax season (ending February 7, 2020), the IRS had received 28,662,000 individual income tax returns. That compares with 28,764,000 received by the same time in 2019, a drop of .4%. On its face, that’s not a significant drop, but compared to the 2018 numbers, the decrease is noticeable. In 2018, the IRS received 30,881,000 individual income tax returns by the second week of the filing season, a drop of nearly 7%.

While taxpayer numbers are down, the IRS appears to be picking up speed: the rate that individual income tax returns were processed has increased. The IRS processed 27,542,000 individual tax returns, an increase of 2.1%. The processing rate stands at about 96% – not bad for this early in the tax season.

And what about those tax refunds? Typically, taxpayers with simple tax returns who count on their tax refunds file early in the tax season.

By the end of the second week, the IRS issued 10,837,000 tax refunds as compared to 11,381,000 – a drop of 4.8%. But compared with those 2018 numbers? The IRS issued 13,517,000 tax refunds for the same period in 2018. That’s a drop of about 20% over two years. The total value of tax refunds issued this tax season is $21.157 billion, down 4.6% for the prior year (and tracking with the number of refunds). Fortunately for taxpayers, the average tax refund is up a few dollars: $1,952 per taxpayer, up .2% from the same period in 2019.

Also up? Visits to irs.gov. The IRS reported 110,871,000 visits to the website, up 4.2%.

As before, this early in the filing season, there’s not a lot that can be deciphered from the data. Some tax professionals are still pointing to confusion over tax extenders while others say that the mandatory refund waiting period for taxpayers who claim the earned-income tax credit (EITC) and the additional child tax credit (ACTC) may mean that taxpayers are adjusting their filing schedules.

And yes, I know that it’s the end of February: IRS has not updated its filing stats since the week ending February 7, 2020.

It sure feels like tax season is just getting started: Tax Day is April 15, 2020, for most taxpayers.

Do you file an accurate tax return and pay what you owe each year? If so, you’re in the majority: a report released by the Internal Revenue Service (IRS) indicates that the nation’s tax compliance rate is holding at 84%, the same as in prior years.

The report also provides an estimate of the tax gap for the tax years 2011 through 2013. The last report issued by the IRS had covered the tax years 2008 through 2010. 

The tax gap refers to the difference between the amount of taxes owed to the government as compared to what the government actually collects. The tax gap can be further broken down into two pieces: the gross tax gap and the net tax gap. The gross tax gap is the amount of true tax liability that is not paid voluntarily and timely. The net tax gap is the amount between the gross tax gap and tax that will eventually be paid late or as a result of IRS enforcement activities.

The average gross tax gap for the tax years 2011 through 2013 is estimated to be $441 billion. That breaks down into three pieces: non-filing ($39 billion), underreporting ($352 billion), and underpayment ($50 billion). By taxpayer type, the estimated gross tax gap works out as follows:

  • Individual income tax: $314 billion 
  • Corporation income tax: $42 billion
  • Employment tax: $81 billion
  • Estate and excise tax: $3 billion

Of those unpaid taxes, the IRS estimates that they’ll eventually collect $60 billion, resulting in a net tax gap of $381 billion. By taxpayer type, the estimated net tax gap works out as follows:

  • Individual income tax: $271 billion 
  • Corporation income tax: $32 billion
  • Employment tax: $77 billion
  • Estate and excise tax: $1 billion

The portion of taxes that are paid voluntarily and on time is called the voluntary compliance rate. The most recent voluntary compliance rate is 83.6%, practically the same as the prior rate of 83.8%. How does that translate into dollars? A one-percentage-point increase in voluntary compliance would bring in about $30 billion in additional tax receipts.

“Voluntary compliance is the bedrock of our tax system, and it’s important it is holding steady,” said IRS Commissioner Chuck Rettig. “Tax gap estimates help policymakers and the IRS in identifying where noncompliance is most prevalent. The results also underscore that both solid taxpayer service and effective enforcement are needed for the best possible tax administration.”

(For a full-size version which downloads as a PDF, click here.)

Compliance is higher when amounts are subject to information reporting – like forms W-2 and 1099 – and even higher when also subject to withholding. For example, misreporting of income amounts subject to substantial information reporting and withholding is 1%, while income amounts subject to little or no information reporting, such as sole proprietor (nonfarm) income, is 55%.

“Maintaining the highest possible voluntary compliance rate also helps ensure that taxpayers believe our system is fair,” Rettig said. “The vast majority of taxpayers strive to pay what they owe on time. Those who do not pay their fair share ultimately shift the tax burden to those people who properly meet their tax obligations. The IRS will continue to direct our resources to help educate taxpayers about the tax requirements under the law while also focusing on pursuing those who skirt their responsibilities.”

When you factor in enforcement and collection efforts, the estimated share of taxes collected eventually rises to 85.8%. 

According to the report, many factors contribute to differences over time in both the gross tax gap and the compliance rates. These include the overall level of economic activity, changes in tax law and administration, updated data and improved methodologies, and changes in compliance behavior on the part of taxpayers and preparers. In the most recent set of data, some of the variances in the gross tax gap estimates not attributable to a shift in methods is due to the growth of the economy following the recession (December 2007 – June 2009). The next set of data should reflect 2014 through 2016, which means that we won’t know the effect – if any – of the Tax Cuts and Jobs Act (TCJA) for quite some time.

According to the most recent data available from the Internal Revenue Service (IRS), just 12,177,779 taxpayers claimed the charitable donation deduction for the 2018 tax year, totaling $102.7 billion. That compares to 33,629,985 taxpayers who claimed the charitable donation deduction for the 2017 tax year, totaling $160 billion. That’s a difference of 21,452,206 taxpayers claiming nearly $37 billion less in donations.

This data reflects forms 1040 processed by the IRS on or before week 30 of each calendar year. It’s worth noting that while the total taxpayer returns processed from year too year are similar (141,156,150 for the tax year 2018 versus 140,456,686 for the tax year 2019), the kinds of returns may be different. Specifically, the returns which have not been processed include taxpayers who may have filed for an extension. Typically, taxpayers who file for extension are those with more complicated returns. For this year, that likely includes those who might have been waiting for state and local tax (SALT) or other Schedule A related guidance; that could translate into a slight uptick in taxpayers who also claim a charitable deduction.

(You can read more about the changes to Schedule A here.)

Still, it’s telling that the numbers have declined. Initially, the change in the standard deduction amounts was meant to simplify the deduction scheme. Analysts predicted that the number of taxpayers who would itemize their deductions would drop from one-in-three taxpayers to one-in-ten. That’s pretty close to what happened. For the 2017 tax year, 42,156,751 taxpayers itemized their deductions – about 30%. In contrast, for the 2018 tax year, only 14,662,008 taxpayers itemized their deductions – about 10%.

And it was expected that the drop in taxpayers who itemized would result in fewer taxpayers who claimed the charitable donation deduction: that’s just math. And a drop in the number of charitable donation deductions doesn’t necessarily mean that fewer taxpayers felt charitable last year: they just might not have been able to claim a deduction for their generosity. 

Some models took that behavior into consideration. Penn Wharton Budget Model (PWBM), a nonpartisan, research-based initiative at the University of Pennsylvania, estimated that “the TCJA will cause total charitable contributions to fall by about $22 billion in 2018.” This reduction, they explained, accounted for a 5.1% reduction in total charitable giving, and a 9.6% reduction in charitable giving reported on individual tax returns. This estimate, they claimed, was consistent and confirmed the estimates of other recent researchers (downloads as a PDF).

Will the downward trend continue? Probably. The standard deduction is slated to remain at its current levels, adjusted for inflation, through 2025. That means that the number of taxpayers who will itemize their deductions is not likely to change.

The more concerning question is whether taxpayers who did itemize for the 2018 tax year may choose to scale back their giving. The irony of lower tax rates is that they also make deductions less valuable. Remember, deductions are reductions in your taxable income (unlike credits which are dollar-for-dollar reductions to your total tax bill). So, when tax rates dipped, your home mortgage deduction was not subsidized as much as before; the deduction is smaller meaning that the after-tax cost of your home is higher. The same is true for other Schedule A deductions; for some taxpayers, a decrease in rates actually boosted the after-tax price of charitable donations. In fact, the Tax Policy Center had predicted that “the TCJA will reduce the marginal tax benefit of giving to charity by more than 30 percent in 2018, raising the after-tax cost of donating by about 7 percent.”

While it’s true that not all donors make their decisions based solely on tax, it’s clear that tax incentives do play a role in the decision to give as well as how much and how often to give. For donors looking to maximize the tax benefits of being charitable, it’s a good idea to check with your tax professional. You can also find some charitable giving tips here.

Where are all of the taxpayers? As tax season comes to a close, the Internal Revenue Service (IRS) hasn’t yet seen an expected rebound in filing numbers after a slow start. Year-to-date statistics show that, compared to 2018, the numbers of tax returns received and processed are still lagging.

Tax season opened on January 28, 2019. As of the week ended March 29, the IRS has received 92,861,000 individual income tax returns. That compares with 94,139,000 individual income tax returns received by the same time last year, a drop of more than 1.2 million returns.

Why the decline in filings? With so many changes as a result of the Taxpayer Cuts and Jobs Act (TCJA), taxpayers may be opting to file for an extension this year. Some delays might be caused by sorting out the pass-through deductions for some businesses, while some optimistic taxpayers may be hoping for those extenders to pass. Whatever the reason, as the deadline creeps nearer, the more likely it is that taxpayers should seek an extension. In fact, according to the IRS website

The IRS recommends that taxpayers file for an extension if they need one. 

(For more on extensions, click here.)

It’s not just taxpayers that are taking their time: the IRS also reported a drop in the rate that individual income tax returns were processed. As of the week ended March 29, the IRS has processed 90,280,000 individual income tax returns. That compares with 91,593,000 individual income tax returns processed by the same time last year, a dip of more than 1.3 million returns.

And what about those tax refunds? Refunds took a tumble early on and then appeared to recover at the end of February when the average refund for taxpayers went up by $40. However, those numbers have dropped again. The IRS has issued just 71,755,000 tax refunds so far this year as compared to 73,396,000 tax refunds for the same period last year. That’s a drop of just over 2%.

The total amount of tax refunds issued to date is only $206.149 billion, more than $6 billion off of the same time last year. You can probably guess that the math works out to smaller average refunds for taxpayers, too: $2,873 per taxpayer compared to $2,893 for the same time last year, a decrease of $20.

There’s more. Despite what feels like a busy tax season for tax professionals, the overall number of returns filed by pros is down by 2%, while the number of self-prepared tax returns has gone up by 2.3%. The latter might also explain the most significant increase reported by the IRS: a 10% increase in visits to the IRS website. The IRS reported 358,112,000 visitors to the site, a spike of more than 30 million.

There are still a few weeks left in tax season, so the overall picture could still change. Tax Day is April 15, 2019, for most taxpayers.

Might we finally be turning a corner? Tax season appeared to be off to a slow start when it opened in January, with initial statistics showing fewer returns filed and smaller refunds issued. Numbers from the Internal Revenue Service (IRS) have remained low since the open, but this past week they’ve finally ticked up where it matters to taxpayers: Average tax refund dollars are up. 

Filing and processing numbers remain low. We’re a month into tax season (week ending February 22, 2019) and the IRS has received 49,923,000 individual income tax returns. That compares with 51,740,000 individual income tax returns received by the same time last year, a drop of nearly 4%.

The IRS also continued to report a drop in the rate that individual income tax returns were processed. The IRS has processed 47,700,000 returns to date, or nearly 5% fewer returns compared with the same time last year.

And what about those tax refunds? Tax refund numbers remain sluggish. The IRS has issued just 38,566,000 tax refunds as compared to 40,504,000 for the same period last year. That’s a drop of 5%, which is admittedly better than the staggering 26% drop earlier in the season

The total amount of tax refund dollars issued remains lower than last year, too. The IRS has issued just $121.203 billion in tax refunds, as compared to $125.671 billion last year. That’s a drop of nearly 4% (again, better than the 40% dip from earlier). 

But here’s where we’re seeing some good news. While the number of tax refunds issued overall is down, the average refund for taxpayers has gone up: $3,143 per taxpayer compared to $3,103 for the same period last year, an increase of 1.3%. That’s $40 more than last year.

Those numbers may reflect some very early earned-income tax credit (EITC) or the additional child tax credit (ACTC) payments. By law, the IRS can’t issue refunds to taxpayers who claimed EITC and ACTC before February 15. 

Also on the way up? Visits to the IRS website. Clicks had been down for the tax season, but IRS now says that 232,545,000 visitors have stopped by the site, an increase of 9.1% over the same time last year.

The numbers of self-prepared tax returns which were e-filed continue to climb. Professionally prepared e-filed tax returns continue to fall, dropping 6.7%, but self-prepared e-filed returns weighed in at 25,997,000, reflecting a 0.9% increase from last year.

The IRS expects to process about 150 million tax returns for the season. So far, they’ve received and processed about one-third of that total.

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.

The Internal Revenue Service (IRS) might have opened tax season on time this year, but tax season is proving to be anything but ordinary. Initial statistics show that, compared with the last filing season, taxpayers aren’t rushing to file their returns.

Tax season opened on January 28, 2019. In the first full week of tax season (ending February 1, 2019), the IRS received 16,035,000 individual income tax returns. That compares with 18,302,000 individual income tax returns received by the same time last year, a drop of more than 12%.

The IRS also reported a drop in the rate that individual income tax returns were processed in the first week. While a decline was perhaps not unexpected considering the challenges presented by the shutdown, the degree of the downturn might raise some eyebrows: 25% fewer returns were processed during the first week of tax seasons as compared with the same time last year.

And what about those tax refunds? Typically, taxpayers with simple tax returns who count on their tax refunds file early in the tax season. Congress touted their tax reform efforts as more simple for taxpayers, promising more money in taxpayers’ pockets. The first week of tax season isn’t quite bearing that out: In the first week, the IRS issued just 4,672,000 tax refunds as compared to 6,171,000 for the same period last year. That’s a drop of more than 24%. The total amount of tax refunds issued was just $8.713 billion, nearly $4 billion off of the same time last year. You can probably guess that the math works out to smaller average refunds for taxpayers, too: $1,865 per taxpayer compared to $2,035 for the same time period last year.

So what can you extrapolate from this data? To be fair, not a great deal. It’s still very early in the season. But the numbers are likely disappointing for lawmakers who hoped that bigger tax refund checks would bolster sagging approval ratings.

Tax Day is April 15, 2019, for most taxpayers. 

It’s just a few weeks until Tax Day. Have you filed your tax returns yet? Chances are, the answer is no.
In 2016, the Internal Revenue Service (IRS) received 152,544,000 individual income tax returns through the end of the year. Taking into account health care reporting requirements, expiring tax breaks, and a relatively healthy economy, those numbers were expected to climb higher in 2017. Yet, with less than a month to go, numbers from the IRS indicate that they’ve only received about half of those 2016 totals.
Here’s how the numbers look so far as compared to the totals from the same time last year:
Filing stats from irs.gov
Filing stats from irs.gov

Even visits to the IRS website at irs.gov are down.
So where have all of the taxpayers gone?
Most tax professionals anticipated a slow start to the season because of enforced delays for tax refunds. More than a year ago, Congress passed the “Protecting Americans from Tax Hikes (PATH) Act of 2015” which required the IRS to wait until February 15, 2017, to issue refunds to taxpayers who claimed the earned-income tax credit (EITC) or the additional child tax credit (ACTC). By law, the IRS could begin to release affected tax refunds on February 15 (you can check out refund date estimates here).

When early filing numbers were down, it seemed to follow that taxpayers who would have otherwise filed early in order to claim a refund were simply waiting for the deadline (even though the IRS emphasized that it would process tax returns normally before that date). But February 15 came and went – and numbers were still down. There was no mad stampede to file following the February 15 date. So what gives?
There were some suggestions that taxpayers were waiting to see what might happen to the Affordable Care Act. The first version of the GOP proposal would have repealed it retroactively to January 1, 2016, while the amended version would have sped along the repeal of Obamacare taxes like the tanning tax, Net Income Investment Tax, Medicare surtax and medical device excise tax. Last week, however, House Speaker Paul Ryan (R-WI) pulled the vote on the American Health Care Act (dubbed “Trumpcare”) and messages have been mixed on when efforts to repeal Obamacare might resurface.
There have also been suggestions that taxpayers were waiting to see what might happen to tax reform efforts. Talk of lower tax rates and new tax credits have fueled speculation that tax bills could go lower – next year. Realistically, however, any significant moves on tax reform won’t happen before Tax Day.
With the uncertainty over the Affordable Care Act and tax reform, some advisors have proposed that taxpayers take a “wait and see” approach this tax season. I can’t get on board with that advice. While you can never rule out a last-minute vote from Congress, the closer we creep towards Tax Day, the more impractical it becomes to do anything retroactively to 2016. If Congress makes it hard for taxpayers to benefit from changes (for example, making taxpayers file an amended return), they would lose any real political capital gained from reform in the first place.
Some folks have posited that a stronger economy might mean that taxpayers who will be writing a check fear that they might owe more taxes this year and are waiting until the last minute to file. That could be true – but remember that you can file early and still wait to pay up until Tax Day with no penalty.
A couple of tax professionals have also mentioned that the dip in filing statistics could be tied to fewer fraudulent returns shuffled through the systems. Maybe. But millions?
I’ll confess that I haven’t filed yet – but I’m not one of those taxpayers skewing the numbers. I never file early for a variety of reasons, including wait times for revised brokerage statements (they just arrived) and forms K-1 from our business. About 10% of taxpayers – myself included – file for extension each year. It will be interesting to see whether those extension numbers will be up this year or whether taxpayers are just waiting until the very last minute to file. Or maybe taxpayers just aren’t filing this year at all.
According to the Internal Revenue Service (IRS), the average federal income tax refund issued to taxpayers for the 2016 calendar year was a whopping $2,860. Here’s how the numbers break down: In 2016, the IRS issued 111,069,000 individual income tax refunds. Those refunds totaled $317.615 billion, which works out to $2,860.

If you’re curious as to how those numbers work out on average by state, the folks at Couponbox have prepared a nifty graphic.

The largest refunds went to taxpayers in Texas and Washington, D.C. The smallest refunds went to taxpayers in Maine and Vermont.

How do those numbers compare to this year? As of the last week in February, the IRS had issued 41,427,000 refunds (down from 46,533,000 refunds at this time last year). The total refunds issued to date in 2017 is $127.227 billion for an average tax refund this season of $3,071. That number will probably dip somewhat since taxpayers who are expecting big checks tend to file earlier in the season.

You should also remember that 2017 is a little different from prior years. Refunds are being issued a little more slowly due to a change in the law. That means that refunds for taxpayers who claim the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) weren’t issued until February 15 at the earliest – some of those weren’t available to taxpayers until the week of February 27. If you haven’t yet received your tax refund and you’re looking for a guess as to when your refund might be available, click here.