Tax Refunds Soar in 2010

Though the total number of personal tax returns (1040s) filed in 2010 is down by nearly 3%, the refund to individual taxpayers is actually up by nearly 10% which is likely due to the American Recovery & Reinvestment Act. The Act outlined provisions for both individuals and companies to receive tax credits through purchase of items like new cars or energy-efficient appliances or even new or second homes.

Now, the Act appears to be paying tax refunds to the people who purchased the items that were covered or who met certain other requirements. Interestingly, the home credit could be claimed on the 2009 or 2010 return, meaning that the refund checks will be coming to different people at different times, hopefully providing a positive steady flow of cash to taxpayers and possibly directly in to the still struggling American economy.

As of March 12, the IRS is reporting that taxpayers are receiving an average refund of $3036, compared with 2009's figure of about $2770 a year ago.

The IRS also noted that e-filing has remained basically flat, with a gain of around .2% bringing the total number of files returned online to just around 56.8 million. More than half - 35.5 million - of those returns filed online were actually done by tax professionals, while about 21.3 were sent in by those who self-prepare.

Those who are unsure of where they stand with a 2009 refund should visit the IRS website and use the tool "Did I Receive a 2009 Economic Recovery Payment?" to see if they qualified for any of the credits outlined in the Act. The Recovery page of the IRS website also contains instructions on how to claim the available tax credits.

"Refunds Up, Returns Down in 2010". http://www.journalofaccountancy.com/Web/20102730.htm
"Tax Refunds Jump Nearly 10 Percent, IRS Says". http://economy.kansascity.com/?q=node/6562
"IRS Issues 2010 Filing Season Statistics". http://www.irs.gov/newsroom/article/0,,id=220489,00.html