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GOP Tax Cuts Didn’t Change Average Refunds Much

Michael Rainey
Tax-filing season is officially over and IRS data released Wednesday shows that in some key respects,  tax returns and refunds this year looked a lot like tax returns and refunds last year, despite the changes in the tax code that took effect in 2018 with the Tax Cuts and Jobs Act.Here are some of the basic stats:* The average refund was $2,725, down 2% from $2,780 last year.* The refund total was $261 billion, down 1.7% from last year’s $265 billion (see the Wall Street Journal chart below).* The number of households receiving refunds rose slightly to 95,737,000, an increase of 303,000, with the percentage of households receiving refunds rising from 73.1% to 73.2%.* The number of returns filed increased by 0.2% on a year-over-over basis, to 137,233,000.Some analysts thought that the total number of tax refunds would drop this year as some taxpayers failed to adjust their withholding levels, and complaints about smaller refund checks were widely discussed as tax-filing season kicked off at the beginning of the year. Last summer, the Treasury Department said that as many as 5 million fewer filers could receive refunds this year due to changes in the law, based on a Government Accountability Office report. But the data released this week shows those concerns were overblown.Although the overall numbers for the 2019 tax-filing season are very close to last year’s, there still could be meaningful differences at the household level that are, as The Wall Street Journal’s Richard Rubin put it, “canceling each other out.” The IRS data did not include information on median refund levels, for example, not did it define which households were receiving refunds by income – important variables that may have changed significantly under the new tax rules.Like what you're reading? Sign up for our free newsletter.

Tax-filing season is officially over and IRS data released Wednesday shows that in some key respects,  tax returns and refunds this year looked a lot like tax returns and refunds last year, despite the changes in the tax code that took effect in 2018 with the Tax Cuts and Jobs Act.

Here are some of the basic stats:

* The average refund was $2,725, down 2% from $2,780 last year.

* The refund total was $261 billion, down 1.7% from last year’s $265 billion (see the Wall Street Journal chart below).

* The number of households receiving refunds rose slightly to 95,737,000, an increase of 303,000, with the percentage of households receiving refunds rising from 73.1% to 73.2%.

* The number of returns filed increased by 0.2% on a year-over-over basis, to 137,233,000.

Some analysts thought that the total number of tax refunds would drop this year as some taxpayers failed to adjust their withholding levels, and complaints about smaller refund checks were widely discussed as tax-filing season kicked off at the beginning of the year. Last summer, the Treasury Department said that as many as 5 million fewer filers could receive refunds this year due to changes in the law, based on a Government Accountability Office report. But the data released this week shows those concerns were overblown.

Although the overall numbers for the 2019 tax-filing season are very close to last year’s, there still could be meaningful differences at the household level that are, as The Wall Street Journal’s Richard Rubin put it, “canceling each other out.” The IRS data did not include information on median refund levels, for example, not did it define which households were receiving refunds by income – important variables that may have changed significantly under the new tax rules.

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