Tax refunds are larger by an average of $40 after fourth week of filing season

Janna Herron
Updated

Tax refunds are now larger than a year ago after the fourth week of filing season, a reversal from the last three weeks, the Internal Revenue Service reported on Thursday.

The average tax refund issued so far increased to $3,143, up 1.3 percent from $3,103 at the same time last year, according to IRS figures. It has issued almost 38.6 million total refunds, down 4.8 percent from last year.

Almost three-quarters of taxpayers whose returns were processed got refunds last year.

The latest numbers now include refunds to taxpayers claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) – which generally increase the size of refunds.

By law, the IRS cannot issue refunds from tax returns that include the EITC and ACTC until Feb. 15 to give the agency enough time to detect possible fraud.

So far, the IRS has processed 47.7 million returns, about 4.6 percent fewer than last year at this time. It also received 3.5 percent fewer returns from taxpayers overall.

The IRS began accepting returns on Jan. 28. Most taxpayers have until April 15 to file their returns.

Car alert: Kia, Hyundai recall over 500,000 cars over potential engine fire risk

Career choices: Looking for a job? You might have a harder time finding a good one in these 10 states

Tax refund expectations

Tax experts expected that some refunds could be smaller for those workers who didn’t change their paycheck withholdings after the new tax law went into effect last year. In some cases, taxpayers who typically receive refunds could end up owing the government because they didn’t withhold enough from each paycheck.

These scenarios don’t mean Americans are paying more in total taxes for 2018. In fact, it’s largely the opposite. The Tax Policy Center estimated that four in five taxpayers will get a tax cut. Only 5 percent would pay more. The rest would have roughly the same tax liability.

If you got a smaller refund or ended up owing the government, it's likely you received your tax savings in each paycheck during the year.

To change your withholdings, use the IRS Withholding Calculator to estimate how much should be withheld from each paycheck. Make those changes on a new W-4 form you can request from your payroll department.

This article originally appeared on USA TODAY: Tax refunds are larger by an average of $40 after fourth week of filing season