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What will your tax refund be? So far, they're smaller by an average of $170

Tax refunds are coming in smaller versus last year, the Internal Revenue Service reported.

» RELATED: Even with IRS staffers returning, tax refunds may be delayed

The average tax refund issued so far fell to $1,865, down 8.4 percent from $2,035 at the same time last year, according to IRS statistics. The number of refunds issued also dropped by 24.3 percent.           

Overall, the number of returns the agency has processed so far is off 25.8 percent versus the same time last year. The IRS has also received 12.4 percent fewer returns from taxpayers. The earliest taxpayers could file returns was Jan. 28. In most states, the last day you can file is April 15.          

"We have said people will be surprised, but how that comes out in the aggregate is to be seen," says Kathy Pickering, executive director of H&R Block's Tax Institute. "Don’t put too much into these initial numbers from the IRS, because the volume is down and it may be hard to parse out the tax reform impact from the shutdown impact."          

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Tax professionals have been warning that refunds could be smaller than expected if people didn't adjust their paycheck withholdings after the new tax law changes.          

The amount withheld from your paycheck is determined by how many allowances you claim on your W-4 tax form. The more allowances you claim, the less money is withheld from your paycheck.          

The federal government decides how much an allowance is worth. For the 2018 tax year, the Treasury Department tried to find an allowance value that improved withholding accuracy, so what you pay in taxes from your paycheck over the year is approximately the same as your total tax liability.         

Getting a smaller refund doesn't mean you're paying more in total in taxes. In many cases, much of your tax savings showed up in each paycheck, which could result in a smaller refund.  

» RELATED: Why you shouldn't want to get a big tax refund check

        

 

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