More Getting Refunds Despite New Law, Murky Forms
WASHINGTON (AP) _ More Americans received federal tax refunds this year than last despite a thorough revision of the tax law and a confusing withholding form, the Internal Revenue Service said today.
Through April 29, the latest figures available, the IRS had certified 55.5 million refunds, compared with 55.4 million at the same time last year. Refunds were claimed on 79.5 percent of the returns that had been processed, up from 79.1 percent a year ago.
″Apparently withholding was more in line with tax liability than we had been expecting,″ said IRS spokesman Johnell Hunter.
Tax experts had anticipated that fewer people might qualify for refunds this year because the new tax law required all employees to file new W-4 withholding forms with their employers in 1987.
The first version of the new form was designed to match tax liability with withholding. But it was so confusing that the IRS eventually developed an alternative, W-4A, that was simpler but less accurate.
Another forecast - that fewer people would itemize deductions under the new law - was closer to target. Through April 15, slightly fewer than half the 49 million couples and individuals who filed the long form, 1040, itemized deductions, compared with 60 percent last year.
Through Friday, the IRS had received 98.6 million returns, a 2 percent increase over 96.7 million in the same period in 1987. Before the year is out, the agency anticipates 107.6 million total filings, compared with 104 million last year.
Some other statistics from this year’s filing season:
-Almost 4.8 million people have asked so far for automatic four-month extensions beyond the April 15 filing deadline. At this time last year, the IRS had counted about 4.4 million. For reasons the IRS cannot explain, the number of extensions fluctuated significantly among the 10 regional centers. At Philadelphia, extensions were 28 percent below last year’s mark while at Cincinnati they were up 47 percent.
-The average refund this year has been $850, compared with just under $849 last year.
-The IRS has processed 69.9 million returns so far this year, down 0.2 percent from 70 million in 1987.
-Only slightly more couples and individuals hired professionals to fill out their returns this year, despite confusion about the new law. Through April 15, 45.6 percent of the returns were professionally prepared, compared with 44.9 percent at the same time last year.