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Tax refunds flow slower into economy after delayed start

Tax refunds flow slower into economy after delayed start

INTERNET MARKETING NEWS

Tax refunds flow slower into economy after delayed start

Susan Tompor

| Detroit Free Press
How tax brackets affect what you pay in income taxesWhy being taxed, say 22% of your income, is a lot more complicated than you may assume. Here’s a breakdown of what you actually pay in income taxes.Just the FAQs, USA TODAYTax refunds are flowing into pocketbooks – and the overall economy – much slower this season after a late start.The Internal Revenue Service reported Thursday that the total dollar amount of tax refunds was down 59.2% through Feb. 19 – just one week after the IRS began processing tax returns. Nearly $47.4 billion in tax refunds have been issued so far this year, but that’s a far cry from more than $117 billion in federal income tax refunds issued through Feb. 21, 2020.The IRS started processing tax returns on Feb. 12, a much later kickoff date than usual. A year ago, the IRS began processing 2019 tax returns on Jan. 27.The IRS said it needed the extra time to program its systems to reflect new tax rules that were signed into law on Dec. 27. Plus the IRS has been busy sending out the second round of Economic Impact Payments in January. The slowdown reflects the fact that the IRS was not dealing with coronavirus-related shutdowns in January and February last year, which continue to slow down operations this year. And the latest data only reflects one week of processing tax returns. Some of this falloff is to be expected after essentially a two-week delay to the season kickoff. The April 15 tax deadline remains in place.The average refund issued so far this year is $2,880 – down 7.8% from $3,125.The IRS said that so far in the first eight days of the 2021 filing season, the agency is issuing an average 2.072 million refunds per day. That compares with 1.44 million refunds on average per day for the first 26 days of the 2020 filing season.And some of the pace could indeed pick up. But many remain concerned that the IRS is going into an extremely challenging year, considering it was still dealing with 6.7 million 2019 returns that had not yet been processed as of Jan. 30. Taxes: Before you file your taxes make sure you know how much was your stimulus payoutWhen to file your taxes: How the timing of your tax return could affect your third stimulus payoutNearly 38% fewer federal income tax returns were processed through Feb. 19 when compared with the same time frame last year.The IRS reported that 29.8 million returns were processed through Feb. 19. That’s down from 48.05 million returns that were processed through Feb. 21 last year.Last year’s numbers, though, take into account that the IRS had more time to process returns. The IRS noted that last year’s numbers were tallied on Day 26 of the filing season. The amount of returns that were received so far by the IRS has fallen, too, compared with a year ago. The IRS had received nearly 49.9 billion in individual income tax returns through Feb. 21 last year.But that number dropped by 30.5% so far this year to nearly 34.7 million individual income tax returns received by the IRS through Feb. 19.The IRS is urging taxpayers to take some simple steps to avoid a variety of pandemic-related issues, such as making sure to electronically file a tax return and requesting direct deposit for refunds. The IRS expects to receive more than 160 million individual tax returns this year. About 90% of tax returns are electronically filed. About 80% of taxpayers provide banking information for direct deposit of their refunds.Contact Susan Tompor via stompor@freepress.com. Follow her on Twitter @tompor.


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