Taxpayers Receiving Bigger Refunds This Season


With five and a half weeks to go in tax season, the IRS reports that more taxpayers have filed returns this year than last and that those taxpayers are receiving larger refunds.

 

As of Feb. 27, individual taxpayers had filed 56 million returns with the IRS, a slight increase over the previous year. The average refund those taxpayers are due has jumped 9%—from $2,637 in 2008 to $2,869 this year.

 

The Service notes that the recovery rebate credit (authorized by last year’s Economic Stimulus Act) and other recent tax breaks such as the new IRC § 36 first-time homebuyer’s credit are probably responsible for the increase in refunds.

 

While the number of returns filed is up slightly (0.6%), the Service actually expects the number of individual tax returns to drop this tax season. Last year’s numbers were inflated by returns that were filed to receive a recovery rebate check, which was sent only to taxpayers who had filed a 2007 return.

 

Where to find January’s flipbook issue

Starting this month, all Association magazines — the Journal of Accountancy, The Tax Adviser, and FM magazine (coming in February) — are completely digital. Read more about the change and get tips on how to access the new flipbook digital issues.

SPONSORED REPORT

Get your clients ready for tax season

Upon its enactment in March, the American Rescue Plan Act (ARPA) introduced many new tax changes, some of which retroactively affected 2020 returns. Making the right moves now can help you mitigate any surprises heading into 2022.