As the result of the Tax Cut and Jobs Act, many people saw more money in their paychecks throughout the year, although the amounts might not have been noticeable. (Keith Srakocic/AP)
Columnist

If I were to give this year’s tax season a title it would be: Refund Mania.

Tax season 2019 has largely been about refunds -- or the lack thereof.

Statistics from the Internal Revenue Service showed that the amount of the average refund was down by 8.4 percent the first week of the filing season and 8.7 percent the second. By the third week of the filing season, the average refund amount dropped by 16.7 percent, a decrease of $529, compared with a year earlier.

The average refund amount trended up for a few weeks but not by much. The widest spread in which the amount increased over 2018 was just $40. By the middle of March, the average refund amount began falling again. As of March 29, the average refund was $2,873, down $20 from the same time last year.

Looking at the big picture, total refunds were $206 billion as of the last week in March, down just over $6 billion from 2018.

Total Federal Refunds 2018
As of 3/30
2019
As of 3/29
Year over Year % Change
Number 73,396,000 71,755,000 -2.2
Amount $212.319 (billion) $206.149 (billion) -2.9
Average refund $2,893 $2,873 -0.7

Source: IRS, 2019 Filing Season Statistics

However, it’s important to note that a downward trend in refunds does not mean people paid more in taxes. As the result of the Tax Cuts and Jobs Act, many people saw more money in their paychecks throughout the year, although the amounts might not have been noticeable.

There was so much change this past year. The new law increased standard deductions. It also removed personal exemptions, and limited or discontinued certain other deductions. For instance, the total combined deduction for sales, property, and state and local taxes is now limited to $10,000 ($5,000 if married and filing separately).

Some people were shocked that they not only didn’t get a refund but that they also owed the IRS. Many people had to pay or received less of a refund than in previous years because they didn’t change their withholdings, which they needed to do to account for the major tax changes.

The tax disgruntle have been voicing their dismay on Twitter since tax season opened.

Here’s the thing. To fully understand your tax situation you need to compare your 2018 return with what you filed for 2017. Don’t just look at your refund. Or, even your tax bill.

“The amount of your refund or the amount you need to send with your return is not the same as the tax you pay. It never has been, and it isn’t now,” said Eric Smith, a spokesman for the IRS. “If you want to know how much tax you paid for 2018, look at Line 15 on your completed 1040.”

Smith offered the following tax tips as tax season 2019 winds down.

-- Check your withholdings. “The experience of some taxpayers this year is a reminder that checking withholding, ideally every year, is a real good idea,” Smith said. “If you didn’t get the refund you wanted or had a balance due you couldn’t handle, adjusting withholding now, while it’s still fresh in your mind, can help avoid a surprise next year.”

After you file, while it’s still fresh in your mind, do a paycheck checkup using the IRS Withholding Calculator, he said. “Then change your withholding by giving your employer a new W-4. Likely, this will mean claiming fewer withholding allowances and possibly asking your employer to take out an extra flat dollar amount each pay period.”

-- If you can’t pay what you owe don’t hide from the problem. “People in this situation are often tempted to put off filing. Many who make this choice often discover later that it was a costly mistake,” Smith said. “The basic penalty is 5 percent for each month a return is late, based on the balance due. Even though it tops out at 25 percent, it still adds up fast.” If the return is filed more than 60 days late, the penalty is usually increased to at least $215.

-- Set up a payment agreement with the IRS if you owe. “Most people qualify, and you can usually do it online in a matter of minutes,” he said. “Payment agreements are a routine piece of business for us, and in recent years, we’ve typically set up 2 [million] to 3 million a year.”

-- Catch up on back-year returns. “Though most people who haven’t filed for a while owe money, many are surprised to discover that the government owes them money. There’s no penalty for filing a refund return, but there is a time limit, typically three years. If you wait too long, you lose it. Unfortunately, we estimate that that happens to over 1 million people every year. For most people, time is about to run out for 2015 returns.”

Estimate of individuals who may be due 2015 income tax refunds

Number of Individuals Median Potential Refund Total Potential Refunds
1,223,000 $879 $1,408,482,000

Source, IRS

This has been a tough year for a lot of taxpayers. But now is the time to start some tax planning for next year if you were surprised after filing your return.

Read more:

Blindsided by your 2018 taxes? How to prepare now for your 2019 return.

What to do right now to improve your 2019 tax return

Can’t pay IRS the taxes you owe? This is the one thing you shouldn’t do.

Color of Money Question of the Week

What surprised you about your taxes this year? Send your comments to colorofmoney@washpost.com. Please include your name, city and state. In the subject line put “Tax Season 2019.”

Live Chat Today

I’m live at noon (ET) today, and with just a few more days left to the April 15 deadline, let’s talk taxes.

Joining me today will be Eric Bronnenkant, head of tax at online financial adviser Betterment. His 15 years of experience include working for EY (Ernst & Young) and Fidelity, and as an adjunct tax professor at Seton Hall University.

It’s also “Testimony Thursday.” Share your financial success stories. Have you paid off debt? Do you finally have an emergency fund?

You can join the discussion by clicking this link.

April is Financial Literacy Month

Tax time is just the right time to give your overall personal finances a look. You’ve got all your documents together anyway.

One thing you should do is take advantage of the various programs and workshops in your community to help you manage your money. Check online for events near you.

If you’re in the Washington metro area on Saturday, April 13, I’ll be delivering the keynote address from 1 p.m. to 2:30 p.m. at the “Road Map to Success,” Bank On Gaithersburg, 10th Anniversary Financial Empowerment Event at Gaithersburg High School Auditorium, 101 Education Blvd., Gaithersburg, MD.

Click here for more information about this free event.

Take some time this month to focus on your finances.

Read more:

How to break your bad financial habits in 2019

How to advocate for financial literacy in your child’s school

How to make kids financially foolproof

Color of Money Columns This Week

Knowledge isn’t power. The right knowledge is power.

Stay informed about your money.

In addition to this newsletter, please read and share my weekly personal finance columns.

-- How filing for a tax extension can pile on to what you owe the IRS

-- How middle-class families could get more financial aid for college

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Have a question about your finances? Michelle Singletary has a weekly live chat every Thursday at noon where she discusses financial dilemmas with readers. You can also write to Michelle directly by sending an email to michelle.singletary@washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested.

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