A few new hashtags have started to spring up on Twitter in response to the trend, including #TaxStory, #TaxScam and #NeverOwedBefore, where Americans are airing grievances about either lower refunds or actually owing money back to the agency for the first time.
The IRS said the average refund so far during the 2018 filing season is $1,865, compared with $2,035 last year – a decline of 8.4 percent. However, on Monday the Treasury Department said reports of a “reduction” in refunds are “misleading,” and in fact they are consistent with 2017 levels.
Even so, lower refunds might not necessarily be a bad thing. It indicates you did not overpay taxes during the year.
As previously reported by FOX Business, more taxpayers were at risk of having their pay underwithheld this year if they did not heed warnings to check withholding amounts. This is the first season Americans are filing under the Tax Cuts and Jobs Act, along with an adjusted withholding structure.
According to a simulation conducted by the Government Accountability Office (GAO) in August, which reviewed the revised federal tax withholding tables for 2018 implemented by the IRS and the Treasury Department, 21 percent of workers are at risk of having their taxes underwithheld – 3 million more than projections based on the old tax code. These individuals could be stuck with a bill instead of a refund check come April if they did not update withholding amounts.
Nevertheless, the overall result of the new law is that about 80 percent of filers should still see a net tax benefit. A Treasury spokesperson confirmed on Tuesday that, in general, taxes will be lower.
However, that could be reflected in higher take home pay instead of a large refund from the IRS.