SAN ANTONIO — For many people, tax season means extra cash for bills, saving or maybe even a vacation. However, a recent IRS report shows a drop in the average refund and the number of people filing their taxes.
Stephen Pennington with Nonprofit Financial Services said a fear about what the tax overhaul means for their refunds has less people submitting their taxes early.
Melissa Blanchett said she was worried but decided to file her taxes because she wanted to get rid of the extra stress.
"You're torturing me," she said as Pennington crunched the numbers into the computer.
"It's not as bad as you think,” Pennington said.
"Am I at least breaking even?" Blanchett asked.
"You are not breaking even, you owe $869 right now," Pennington responded.
Pennington said Blanchett owes a lot less money under President Trump's 2017 tax overhaul. Blanchett's son also reaped from the benefits of the tax changes. He received nearly $700; he said that’s more than last year.
But not everyone is seeing a bigger refund. According to the IRS, the average tax refund is down 8.4 percent this year. The agency says the average refund was $2,035 last year, but so far this year it’s down to $1,865. That’s a difference of $170 for the average return.
"The reason why people might be seeing lower refunds this year is because they are being taxed less and their employers are withholding less," Pennington said.
The biggest changes under the new tax law:
"The doubling of the standard deduction, second would be the doubling of the child tax credit and then third would be the qualified business income deduction of 20 percent," Pennington said.
"He got a higher refund then what he had normally been getting,” Blanchett said. "It was beneficial to me because I didn’t have to owe as much money as I thought I was going to owe.”
Pennington advises people who want to get a bigger refund next year to increase their withholdings. He also says it’s possible the average refund will increase as more people file their taxes.