Posted by The TaxAdvocate Group, LLC

What Was The Average Tax Refund This Season

What Was The Average Tax Refund This Season

In the United States, average tax cuts increased 1.3% in this period which has never been experienced over the previous year, but the total amount of these checks and the number of payment recipients continued to decline.

The IRS released its data recently on the average tax refund, comparing the size and value of tax refunds to this same period of the year before Republican tax law. They released the figures after Treasury Secretary Steven M. announced a 17% increase in tax refunds issued within this period. (The value for the Internal Revenue Service was 19%).

This season, tax returns have raised a lot of concern, largely because taxpayers are facing for the first time the new laws that came into effect in 2018. In this important review, amended or deleted, leaving to taxpayers fewer options to reduce the burden of the IRS.

In contrast, last year's financial audit promised to put more money in the pockets of American workers. However, for many Americans, this meant having more money in their salaries, money that was then warned for many who did not expect a refund. But the new data shows that the discounts are higher than this year.

On March 15, 2019, the average reimbursement from respondents was $3,068. This represents an increase of $3,046 for the 2018 revenue season. Here is how these repayments were distributed by generation:

Generation
The average tax refund as of March 15, 2019
  • Gen Z
- $3,703
  • Millennials
- $2,565
  • Gen X
- $2,021
  • Baby Boomers
- $5,403
  • Silent generation
- $1,648

Obviously, there is a substantial division in the refund portion. Boomers are the most important for repayments, but a good reason is probably that they own properties and fund their retirement plans more aggressively than younger generations. As a reminder, contributions to non-Roth pension plans are, in the case of 401(k) plans, made with pre-tax dollars, while contributions to the IRA are deductible. Members of the silent generation, in turn, are less likely to have a mortgage, which leaves them with fewer tax exemptions. And since they are mainly retirees, they obviously do not fund their pension plans.

Most surprisingly, Generation X members receive lower repayments than Generation Y and Generation Z because they are more liable than their younger counterparts to become owners of their own home and thus benefit from the tax. This clearly shows that ownership is not the only factor that influences total repayments.

Is Having A Larger Refund Better?

Many taxpayers are programmed to think that the higher the payments, the better. In fact, a larger repayment means giving the government a higher interest-free loan for the year in exchange for nothing, whereas you could have raised that money instead. This is particularly important for people with low or no income who live from one salary to another. With a few hundred dollars more in your bank account each month, you can tell the difference between accumulating debt and avoiding this unwanted fate. Therefore, if you are looking for a substantial refund this year, you may decide to change your retention to request additional discounts on the W-4. This will give you access to more money in advance.

If you are worried that having more money on your salary will lead to insufficient tax payments (thus creating a situation in which you owe money to the IRS in the next fiscal year), Here's a simple solution: in a dedicated savings account, to earn interest rather than allowing the government to do it. If you need this money for emergencies during the year, you can open this account if necessary. If not, let him stay and grow modestly. So, if you have IRS money during the 2020 deposit season, you will have the means to pay this tax debt.

It is too early to know what the overall tax cuts will be this season, as many of the candidates will inevitably wait until the last minute to make their statements. In both cases, one thing is sure: if you want a refund this year, use it wisely, especially if you live on a salary without a financial safety net.

The TaxAdvocate Group, LLC
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