Smaller refunds 'positive news' for taxpayers, Treasury says
Treasuring Department is pushing back on claims that tax refunds for 2018 are smaller compare to last year. Diversified Private Wealth Advisors’ Dominick Tavella says tax refund won’t get better.
Average tax refund amounts are down so far this filing season, but the Internal Revenue Service (IRS) and the Treasury Department are cautioning taxpayers not to be overly concerned about the size of their checks this year.
The average refund during the first 12 days of filing season was $1,949, the IRS said on Thursday. That compares with $2,135 during the same period last year – a decline of 8.7 percent.
The IRS has received 28.7 million returns so far, down nearly 7 percent from the year prior. It has processed 10 percent fewer returns when compared with the same period last year.
The data covers nearly one-fifth of the total returns the agency expects to receive this tax season.
Overall, Treasury officials said they expect fewer Americans to get refunds this year when compared with last year. However, they said most Americans are still expected to see a net tax benefit as a result of the passage of the Tax Cuts and Jobs Act.
“Most people are seeing the benefits of the tax cut in larger paychecks throughout the year, instead of tax refunds that are the result of people overpaying the government,” the spokesperson said in a statement on Thursday. “Smaller refunds mean that people are withholding appropriately based on their tax liability, which is positive news for taxpayers.”
As previously reported by FOX Business, taxpayers have taken to social media to air complaints about smaller or non-existent checks, with some even owing the agency for the first time. Some taxpayers were at risk of having their pay underwithheld this year if they did not heed warnings to check withholding amounts. This is the first season Americans are filing under the Tax Cuts and Jobs Act, along with an adjusted withholding structure.
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A spokesperson for the Treasury Department on Tuesday told FOX Business in a statement that individual taxes will be lower for “approximately 80 percent of filers” thanks to the Tax Cuts and Jobs Act. Meanwhile, another “roughly” 15 percent of people will see no change, according to the agency. That leaves about 5 percent who will owe more.
FOX Business' Edward Lawrence contributed to this report.