Average tax refunds are down 8.4 percent under Trump tax law

Average tax refunds were down last week 8.4 percent for the first week of the tax season over the same time last year, according to the Internal Revenue Service. Dipping refunds are inflaming a growing army of taxpayers stunned by the consequences of the Trump administration’s tax law — and the effects of the partial government shutdown. Average Tax Refunds Down 8.4 Percent As Angry Taxpayers Vent On Twitter:

The average refund check paid out so far has been $1,865, down from $2,035 at the same point in 2018, according to IRS data. Low-income taxpayers often file early to pocket the money as soon as possible. Many taxpayers count on the refunds to make important payments, or spend the money on things like home repairs, a vacation or a car.

The IRS had estimated it would issue about 2.3 percent fewer refunds this year as a result of the changes in the federal tax law, according to Bloomberg. MSNBC reports that 30 million Americans will owe the IRS money this year — 3 million more than before Trump’s tax law.

“There are going to be a lot of unhappy people over the next month,” Edward Karl of the American Institute of CPAs told Politico. “Taxpayers want a large refund.” Some 71 percent of taxpayers received refunds last year worth about $3,000 on average, according to Karl.

[T]axpayers are complaining on Twitter that they have always received a refund — but now owe the IRS instead.

MSNBC’s Stephanie Ruhle interviewed tax expert David Kay Johnston on why “Millions of Americans won’t get a tax refund and might have to pay.” Video Link.

The number of refunds sent out by the IRS was also down — about 24 percent — as the agency struggled to get up to speed after the government shutdown. The agency sent out about 4.67 million tax refunds in the week ending Feb. 1, compared with about 6.17 million in the same period in 2018, according to IRS data.

This year’s filing season, which began two days after the shutdown ended on Jan. 25, is complicated because it’s the first after the 2017 tax law was enacted. Though President Donald Trump boasted that the new code would be so simplified that people could file their taxes on a postcard, that’s not the case.

In addition, the changes complicated payroll withholding, so that not enough money was withheld by employers in many cases, meaning that people now owe more taxes. The new law also capped IRS deductions [at $10,000] for paid state and local taxes (SALT), including real estate taxes, resulting in a nasty surprise for many filers. Several other deductions are no longer allowed.

Tax refunds were delayed by the Trump Shutdown of the government which lasted more than a month, and now there is a good chance that the IRS will have to shut down again on Friday with yet another Trump Shutdown of the government over his vainglorious medieval monument to himself. Border talks stall as another shutdown looms:

The Senate’s top Republican negotiator, Sen. Richard Shelby (Ala.), on Sunday said the talks had stalled in part because Democrats were raising new concerns over deterring immigrants at the border[.]

Acting White House chief of staff Mick Mulvaney warned Sunday that a shutdown is still on the table and accused Democrats of not presenting a consistent offer.

“Is a shutdown entirely off the table? The answer is no,” he said on NBC’s “Meet the Press.”

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Congress must approve — and Trump must sign — a spending package by Friday to avoid another partial government shutdown.

With the prospect of a deal by week’s end dimming, the White House is reviewing different options for funding the wall.

Mulvaney said the president is likely to combine whatever money Congress appropriates, or has already appropriated, with reprogrammed federal money.

“We’ll take as much money as you can give us and then we’ll go off and find the money someplace else, legally, in order to secure that southern barrier, but this is going to get built with or without Congress,” he said on “Fox News Sunday.”

Everyone is posturing and talking tough, but it doesn’t look good for any compromise to keep the government open after Friday. If the IRS has to shut down, again, its backlog of tax returns to process will only grow larger resulting in longer delays for refunds, assuming that you do not owe taxes as a result of the Trump tax law.