Part 1/5 of Tax Filings & Recoveries
Over the last 20 years in the collections industry, I have maintained a record extracted from the IRS of tax season filing data. I have noticed some trends over that time related to when taxes are filed nationwide, when refunds are issued, and when direct deposits are made.
FLOCK Specialty Finance is sharing this information and insight with you during the 2021 tax filing season in the hopes it helps market participants across many industries to take advantage of the seasonal opportunity from taxpayers receiving additional funds.
When I began keeping these statistics, the tax season was very concentrated in the late March to April time frame. With the advent of electronic filing, more savvy consumers, and direct deposit, I have seen that timing change. All dates and charts refer to filing weeks, which is how the IRS tracks the data. This aligns with the weeks of the year. Week 13 is the week of April 15th.
It is important to note that the time hasn’t just moved earlier or to exactly when it has moved. It has shifted into two distinct periods. Another point, all dollars shown are actual as of the year of the filing, no adjustment for depreciation of the currency has been assumed. The last point is important in that inflation has remained low, but not zero. This tends to indicate that tax refunds are not growing as strongly as they did in the past which may put downward pressure on tax refunds associated with payment activity.
This data is only for national tax filings and does not account for variations at the state levels resulting from differential tax amounts by residency.
The articles will be posted in a series over the next several weeks, covering Tax Filing Timing, Tax Refunds, Direct Deposits, and Disruptions. We will only post the updates at our LinkedIn page with a pointer towards flockfinance.com where we will host the full post and charts.
Damon W. Edmondson
Chief of Analytics, FLOCK Specialty Finance