National trend of smaller tax returns not norm here

Published 2:06 am Friday, February 15, 2019

Local accountants and tax preparers say the returns they’ve filed to date aren’t following the national trend of smaller refunds for taxpayers.

In the second full week of filing season, the IRS reported Thursday that the average tax return is down 8.7 percent, from $2,135 to $1,949. The agency has processed 27 million returns to date.

Greg White from White and McClung analyzed 10 tax refunds and six out of the 10 had larger refunds than last year.

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“Seven of those ten had a lower tax break,” White said. “And that is with the same circumstances. That reflects the Trump tax cuts, but there are certain aspects of that law that doesn’t impact people as favorably, and that is shown in the three that didn’t have a lower tax break. I expect, at the end of the year, we will see about 80 to 85 percent of people that have a lower tax break.”

White said that he has been extremely busy, but people are getting their tax refunds at the usual pace.

“From the time that a client processed their return, they got it back in 10 days,” White said. “That is a bit slower than last year’s, because I think the IRS made it to the seven day mark, but it takes usually around seven to 10 days.”

There is an argument that people are getting smaller tax refunds, White said, which makes the new tax law disingenuous.

“The refunds are smaller because less is getting paid in,” White said. “Seven out of 10 have a smaller tax liability, but if seven out of 10 paid in less than they did last year, then they are going to have smaller refunds. It is just disingenuous to look at the refund and declare something like that.”

For Amanda Marler, manager at Jackson Hewitt, this year’s tax season started out slow, but has sped up the past week.

“I think we were slow because there was a fear that people would not get their refunds,” Marler said. “Which is an absolute myth. In fact, we have already started cutting checks for people.”

She said that she has not seen many refunds where the amount was lower than last year.

“Maybe with the state,” Marler said. “But as for as the federal, with the tax reform, most of our returning clients are getting more than they got back last year.”

Now, they are beating their numbers from last year of people that they have seen.

“It definitely started out slower,” Marler said. “But now we are beating our numbers from last year and business is picking back up.”

Marler believes that people are getting larger refunds due to the new tax reform.

“The standard deductions have changed,” Marler said. “With the standard deductions doubling, it has actually put more tax dollars in the pockets of our clients.”