On the face of it, IRS filing season statistics look normal so far for 2020 as far as the size of refunds go with the data through the March 20 period. However, the pace of filing is down and likely attributable to one thing: COVID-19 and disruptions associated with the efforts to minimize its spread.
Individual taxpayers — if they owe taxes this year — are going to take advantage of the extended deadline of July 15. Even if they don’t owe taxes, there are many who just can’t stand to do the paperwork a day sooner than necessary who will procrastinate. Some taxpayers have had to delay meetings with tax preparers during a period of self-isolation. So, while it is more usual to see filings pick up in the first weeks of April, that is not going to happen this year.
On the other hand, those who have filed and are getting a refund are seeing refund sizes similar to the last few years. The size of a direct deposit refunds is a bit larger than that for a check, but the gap between the sizes tends to be smaller the further into tax season.
In the last few years consumers have been more willing to spend their refunds on discretionary items rather than putting it into savings or paying down debt. That will not be the case in 2020 where many consumers are relying on refunds to help them through the a period of enforced idleness. These will still be filling as soon as possible to get the money in hand.
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