The change that has been occurring in the issue of tax refunds has been remarkable, since now, more and more taxpayers must write a check to the government instead of receiving a refund as they used to receive it, this trend has been something that has captured the attention of many of the taxpayer citizens.
Although the reasons for these decreases and the increase in payments to the government are not entirely clear, it could be because we are facing changes in fiscal policies, adjustments in tax rates or even changes in the financial situation of taxpayers, it is important that taxpayers are aware of these changes and reorganize their financial strategies, whatever the cause.
Why Tax Refunds Are Decreasing in 2024
So far this year 2024, the number of refunds has decreased by 3.3%, as indicated in the latest IRS statistics, which were released before the filing date on Monday, the year 2023 and the year 2022 there was also a decrease.
If it is true that no one is sure what is happening, some say that it may be the changes in the way people work, others suspect that the way the government calculates taxes is not quite right in terms of how much taxes should be withheld from citizens’ checks.
These changes could have consequences on how and whether people are complying with tax laws.
“We want to make sure that people are, in fact, filing their returns,” said Bob Kerr, a former longtime IRS official and now a Washington-based tax practitioner. “And there are a lot of people who do it because it suits them to do it.” “I think this is really going to be a problem.”
Before the pandemic, about three-quarters of taxpayers received refunds, now 65% do. The IRS made a decrease last year in the number of refunds (105 million) than in 2010, still having collected 20 million more in returns.
The amounts of the refunds as such remains quite stable, those who have received any this year the approximate payment is $3011, that is $133 more than in 2023.
The issue of refunds is something of great importance, politically and economically. Since taxpayers use it as a kind of forced savings, even for some it is the largest single payment they receive all year.
Some experts on the subject of taxes are asking the question about what the decrease in refunds will mean for tax compliance. Of course, many people file their taxes because they feel it is a duty and many others because they are afraid of the IRS.
But waiting for a 4-digit figure to be paid is a way for the tax agency, not to mention the tax preparation industry, to get people to list their taxes for filing.
Bigger But Fewer Tax Refunds Checks: What’s Going On?
There’s an important issue here that’s a sign of a flagging economy: Nearly one-third of taxpayers say they rely on tax refunds to make ends meet, according to a Credit Karma survey. Although the average refund was $3,011 through April 5, a substantial increase compared to the $2,878 processed in the same period last year (4.6% increase), there are fewer refund checks issued.
There is no clear explanation by the IRS as to why fewer people would receive refunds this year, and those figures could change once last-minute returns are taken into account. If you want to know where is your money, use the Where’s My Refund tool, official of the IRS. Refund status updates typically appear 24 hours after e-filing a current year return.
