IRS Reports Record-Breaking Tax Season
A downturn in the economy coupled with new tax breaks resulted in some interesting records set by the IRS this spring. More refunds were processed during this tax filing season than ever before, and the refunds were larger than they were in the past. As of April 19, the IRS had processed approximately 77 million refunds. The average refund was $1,937, up 13 percent from last year. Nearly half of the taxpayers receiving refunds requested direct deposit of the refunds into their bank accounts.
Electronic filing of 2001 tax returns increased by 14% over last year with 45.8 million tax returns filed electronically as of April 19. Last year taxpayers electronically filed 40.2 million tax returns.
Taxpayers owing money were 8 percent more likely to make electronic payments this spring than they were last year. The IRS reports that 626,000 electronic payments were made for 2001 income tax returns. Credit card payments were down this year by approximately 15,000.
Factors contributing to the increase in quantity and amount of refunds include lower tax rates, an increase in the Child Tax Credit, an increase in layoffs that can move taxpayers to a lower tax bracket, and capital losses due to a downturn in stock market performance. Taxpayers who make estimated payments frequently base their payments on the prior year income tax. That practice resulted in an overpayment of estimated taxes for many taxpayers this year.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.