Tax Refunds UP 12% Across Mass.

Monday, February 27, 2012

Jaclyn Cashman, GoLocalWorcester News Editor

Massachusetts has access to less cash since taxpayers are filing earlier, said one Massachusetts accountant. Worcester County residents have about 7 weeks until the April 17th tax filing deadline, but already statewide refunds are up 12 percent over compared to last year. The Massachusetts Department of Revenue(DOR) is reporting that refunds have topped $411 million. They are running $42.6 million ahead of a year ago at this time

Strapped for cash

So what does this mean? CPA, Dennis Barbo said it could be a sign of the economy. People are processing their returns quicker because they need every last dollar they can get their hands on. Barbo said, "I’m not surprised that early filings are ahead of last year. There was very little change in the tax regulations so tax preparers and software providers were up to date and prepared earlier."

Barbo said mostly likely people want to get their money back as soon as possible, because they need it to pay bills. They want their refunds. Barbo said when the economy is stronger they are not as apt to file as quickly.

This could be bad news for Massachusetts. Barbo said when more people file early that means Massachusetts has access to less funds in its bank account. When people file later, Massachusetts can tap into more money.

DOR numbers show that of the 1.058 million tax returns filed to date (up 145,591 or 16 percent from a year ago), 80 percent have received a refund averaging $486. The number of refunds is up 11 percent, from 763,207 a year ago to 846,250 late last week.

Bob Bliss from the DOR said, "It seems clear that many taxpayers took the advice of the IRS last year and waited to file until the middle of February, when the IRS published tax tables required for taxpayers who itemize. The delay in publishing the tables was due to last-minute tax law changes Congress enacted at the end of 2010, including the extension of the Bush tax cuts."

Bliss said there was no such delay this year, and as a result, taxpayers who know they will get refunds have filed early, and in large number. So far, 90 percent of returns have been filed electronically, a percentage unchanged from a year ago.

Those filing electronically are receiving refunds sent to their bank accounts in less than four business days. Those relatively few taxpayers filing paper returns are getting their refunds in about five business days.

Barbo gave GoLocalWorcester some advice to avoid holding up your refunds, "Taxpayer’s should verify that their return includes all required schedules or attachments and that their return is mathematically accurate. Otherwise their refund may be held up."

Tax help

GoLocalWorcester recently did a story about Worcester State University offering free, confidential tax preparation to taxpayers with incomes of $50,000 and under.

If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone face-to-face, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative across the counter. No appointment is necessary - just walk in. There's one in Worcester.