Last-minute tax filers will see 'positive surprises,' economist says

By TaxesFOXBusiness

Tax refund sticker shock

Aneta Markowska of Cornerstone Macro discusses why the IRS may be receiving fewer tax returns this year.

The tax filing deadline is just days away, and the IRS is reporting that fewer tax returns have been processed this year so far.

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According to the IRS, 92 million people have filed individual tax returns this year, compared to 94 million people during the same time last year. One reason for this might be that some Americans aren’t expecting a refund.

“It’s been a disappointing tax season,” Aneta Markowska, the deputy chief economist for Cornerstone Macro told FOX Business’ Maria Bartiromo on Thursday. “We expected refunds to be much stronger and that hasn’t panned out.”

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By the end of March the Treasury Department had issued 71.8 million refunds, compared to 73.4 million this time, last year, the IRS said. But Markowska believes the last minute tax filers will see “positive surprises.”

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Changes to the child tax credit, a key driver for over withholding and refunds were also skewed toward higher income households. In addition to being doubled, the CTC phase out threshold was raised from $110 thousand to $400 thousand, which means that the largest benefit goes to households making well in excess of $50 thousand, according to the Tax Policy Center.

"It’s inevitable that at some point taxes will have to go back up,” Markowska added.

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