The numbers for the start of income tax return season for the credit and collection industry are not as great as one might hope, according to data released by the Internal Revenue Service.
The average income tax refund through the first week of filings is 8% lower than the same period last year. On average, individuals who have filed their income tax returns are receiving a refund of $1,865, down from $2,035 a year earlier. The IRS has received about 2.3 million fewer filings through Feb. 1, compared with the same period last year, and processed 4.6 million fewer returns.
About 35% of the returns that have been processed this year have ended up with a refund, according to the IRS, compared with 34% a year ago.
Expectations on the amount individuals are expected to receive on their income tax returns have been “all over the map,” according to a published report. Morgan Stanley, for example, is predicting that returns will be 26% higher this year, compared with 2018. Democrats, meanwhile, are predicting that more people will end up owing the IRS money once returns are filed, because of issues with the amount of withholdings after enactment of the Tax Cuts and Jobs Act.
About 71% of filers received a refund of at least $3,000 last year, according to the American Institute of Certified Public Accountants, which, for most of those filers, represented the largest single financial transaction of the year.