Tax season remained sluggish in early February, but tax refunds continued to arrive steadily.
Every tax season has its own unique characteristics and nuances. Oddly enough, the Internal Revenue Service has received 7.7% fewer returns this year. According to the most recent data published on Friday, the agency has processed 7.6% fewer returns through February 7.
Why the delays?
A variety of factors, including misleading online tax advice via social media, a flood of 1099-K forms, political rancour, some delayed deadlines in states hit by federal disasters, and the calendar itself, could be at work in preventing many people from filing their returns early.
How much money are people seeing in tax refunds?
According to the IRS, the average federal income tax refund was $2,065 during the first two weeks of this year’s tax season, which ended February 7. That is an 18.6% increase from last year’s tax season through February 9, 2024.
Many people who file tax returns in late January or early February want to get their refunds as soon as possible.
If you file your federal income tax return on February 17, for example, you may expect to receive a tax refund by February 28 if you e-file, request that the refund be directly deposited into a bank account, and the IRS does not reject the return.
If you e-file your return on February 17 but want a paper refund cheque mailed to you, you may have to wait until March 7, according to estimates from CPA Practice Advisor, a tax professional resource. The publication notes that filing during peak season, which runs from late March to April 15, may result in slightly longer wait times.
Many people who claim the earned income tax credit or the additional child tax credit should expect delays. The IRS stated that taxpayers claiming these credits can expect to receive refunds by March 3. That is assuming you file your return online, choose to receive your refund via direct deposit, and have no problems with your tax return.
The IRS stated that some taxpayers may receive their income tax refunds a few days early. The IRS “Where is My Refund?” tool is expected to provide an update by February 22 for most early filers who claimed the earned income tax credit or the additional child tax credit.
The IRS expects filing season numbers to even out as more tax returns arrive in the coming weeks and the April 15 filing deadline for most taxpayers approaches.
How change in Washington has some rethinking their taxes
It is difficult to determine why people might be putting off filing their taxes. However, one possible explanation is that the new Trump administration differs from the first.
We are seeing a lot of quick moves and, in some cases, outright chaos as President Donald Trump tries to cut spending, offer buyouts, and take other drastic steps to reduce the federal government.
After taking office on January 20, Trump issued a slew of executive orders. And some people may have mistakenly believed that key tax breaks could be applied to their 2024 returns simply through executive order. It is not true.
Some social media users speculated that Trump’s proposed “External Revenue Agency” would replace the IRS and abolish income taxes. But Trump did not abolish the IRS or income taxes.
The tax breaks proposed during the campaign, such as no taxes on tips, are unlikely to be retroactively applied to 2024 returns as April approaches.
Mark Steber, chief tax officer at Jackson Hewitt Tax Service, stated that some false information is spreading on social media, implying that taxpayers should “wait and the IRS will go away.”” Others believe that changes will affect the IRS, and you will not owe taxes.
Steber believes that kind of silliness may cause people to postpone filing their tax returns for no apparent reason.
“I see virtually no chance of retroactive tax administration on political promises from the election,” according to Steber.
“If the changes happen at all, political statements rarely end up exactly as tax law changes and let alone retroactively,” according to him.
It is just difficult to do, he explained.
Tax law changes require widespread agreement in Congress, where Republicans hold slim majorities in both the House and the Senate. There is much uncertainty about what will be proposed until Republicans in Congress support a specific tax plan.
“I think the 2026 tax year be the first year of real substantive change,” according to Steber. If so, taxpayers may notice the changes when they file their 2026 returns in 2027.
Aside from potential tax cuts, a number of other factors could contribute to a slowdown in the early tax season. They include:
A change in the tax season kickoff date
The 2025 tax season began two days earlier than in 2024, which may have resulted in more filings by now. But it did not. The Internal Revenue Service has an explanation for that.
This year, the IRS began accepting and processing e-filed income tax returns for individuals on January 27. Last year’s tax season began on January 29, and the first week of data ran through February 2.
The IRS initially reasoned that many people this year did not file in the first week because they may have been waiting for important paperwork. In theory, last year’s January 29 kickoff was closer to a January 31 deadline for employers to issue W-2 forms.
The W-2 is an important form that shows income and tax withholdings. It is possible that people had more paperwork on hand at the start of last season.
Of course, many tax filers can now obtain W-2 information online rather than waiting for the documents to be mailed to them.
The latest figures show an improvement from the first week, when the IRS processed 15.8% fewer returns than a year ago. The IRS reported that during the first week of the tax season, it received 14% fewer returns than the previous year.
An expected flood of 1099-K forms
More gig workers are likely to receive a 1099-K this year, indicating how much money they earned from these short-term jobs in 2024 — and some may be spending more time on their tax returns to figure out what to do.
Profits from the sale of goods, such as concert tickets, and money earned from a side hustle, such as food delivery, were always taxed. This year, however, changes in the reporting rules mean that more people are receiving tax forms that track their money.
According to Steber of Jackson Hewitt Tax Service, the increased number of tax forms, such as 1099-K forms and others, may be giving some people the impression that it is better to “wait until I have all my stuff.”
That is a good idea because you want to submit an accurate return.
The 1099-K usually arrives in late January or early February.
If you have never dealt with a 1099-K before, it is not surprising that many people are hesitant to see what they need to do with it.
This year, taxpayers will receive a 1099-K from payment card companies, payment apps, and online marketplaces if the total amount of their business transactions in 2024 exceeded $5,000.
Under the previous standard, the 1099-K was only sent to those who received more than $20,000 and conducted more than 200 transactions on third-party payment processing platforms in 2023 and previous years.
The IRS also receives these documents, so a lower threshold means more paperwork for 2024 income.
In 2024, if you sold Taylor Swift or Detroit Lions tickets through an online marketplace like StubHub, the $5,000 threshold would still apply. The profit you made from those tickets would be taxable.
Overall confusion out of Washington
The IRS is also experiencing disruptions this tax season. The White House announced a hiring freeze at the IRS, which could last much longer than hiring freezes at other federal agencies.
According to Reuters and other reports, Elon Musk’s cost-cutting group is reviewing IRS operations.
Trump emailed supporters on Saturday, asking, “Are you tired of being harassed by the IRS? Maybe it is time someone audited them for a change.”
The email’s headline read: “Should I audit the IRS into oblivion?”
At one point, there were reports that Musk, whom Trump had given broad authority to run a new “Department of Government Efficiency,” had killed Direct File, a new free online IRS service.
IRS Direct File was expanded to 25 states, but not Michigan, for 2024 tax returns. Musk’s post on X stated: “That group has been deleted,” sparking rumours in early February that Direct File was no more.
Many residents in these 25 states—but not all tax filers—can still use Direct File to file their state and federal income taxes this year.
More than 30 million taxpayers from nearly half of the country can use the new, free program to prepare and file their federal income taxes online directly with the IRS.
Disaster relief
Millions of taxpayers can file after the April 15 deadline due to federal disaster relief. They may wish to file earlier, but they may also need to take their time.
Taxpayers in Alabama, Florida, Georgia, North Carolina, and South Carolina, as well as parts of Alaska, New Mexico, Tennessee, Virginia, and West Virginia, will have until May 1 to file their 2024 returns and pay any applicable taxes. Additionally, these taxpayers would have until May 1 to file their 2023 returns.
On January 10, the IRS announced an extension for victims of California wildfires. Individuals and businesses in southern California who have been affected by wildfires and straight-line winds since January 7 are eligible for tax relief.
California taxpayers now have until October 15 to file and pay their federal income taxes for 2024, based on disaster relief in any area designated by the Federal Emergency Management Agency.
Many people prefer to file early in order to receive their refund. Many people will wait, however, if they are dealing with the aftermath of a disaster.
Make no mistake: many people filed their tax returns early this year. According to IRS data, the agency received 23.58 million returns through February 7. The IRS processed 23.5 million returns during the first two weeks.
It is important to note, however, that the IRS number for total tax returns processed includes tax returns received in the preceding or current year and processed in 2025. The IRS has not processed nearly all 2024 tax returns received this year.
According to Matt Hetherwick, chief program officer for the Detroit-based nonprofit Accounting Aid Society, the number of tax returns prepared during the first weeks of this year’s tax season has increased overall.
“Our appointment scheduling is also seeing an increase in demand when compared to the same time last year,” Hetherwick told me.
He stated that most of the tax work appears to be on track at this point.
“It is still very early in the filing season, so the earliest of filers would typically just now be getting refunds back,” Hetherwick told reporters.
“We are busy, and we have not received any calls from clients concerned with the length of time it is taken to receive their tax refund.”
