Tax Refunds Are Rolling In, but the IRS Reports a Drop in Early Filings This Season
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IRS Announces Early Tax Refunds for Some—But Confusion and Delays Persist
For taxpayers eager to get their refunds as soon as possible, there’s good news: the IRS has announced that some may receive their income tax refunds a few days earlier than expected. The agency’s “Where’s My Refund?” tool is set to update by February 22, particularly for early filers who claimed the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). However, as tax season unfolds, several factors—from changes in Washington to new reporting rules—are causing confusion, delays, and even procrastination among some filers.
Why Are Some People Delaying Their Tax Returns?
Typically, early filers rush to submit their returns as soon as the IRS opens the floodgates, but this year, that urgency seems to have softened. What’s causing the hesitation? Well, a mix of misinformation, tax law changes on the horizon, and an influx of new forms seems to be at play.
Political Uncertainty and Misinformation
With a new administration in the White House, there’s been a whirlwind of changes, executive orders, and plenty of speculation. Some taxpayers may be under the impression—wrongly—that tax breaks promised on the campaign trail could somehow apply retroactively to their 2024 returns. Social media has only added to the confusion, with viral posts suggesting that taxes on tips might disappear, or even more outlandish claims that the IRS itself could be abolished.
Tax experts, including Mark Steber from Jackson Hewitt Tax Service, have pushed back against these rumors, reminding people that tax law changes require congressional approval. If any substantial changes come, they’re more likely to affect the 2026 tax year rather than 2024. Steber warns against the “wait and see” approach, urging taxpayers to file on time rather than gambling on political promises that may never materialize.
New IRS Filing Season Challenges
The IRS kicked off the 2025 tax season two days earlier than last year, officially opening e-filing on January 27. Logic would suggest that an earlier start would lead to a flood of early filings—but instead, the IRS reported processing 15.8% fewer returns in the first week compared to last year. Why the lag?
One possible explanation is that many filers were still waiting on key documents, such as W-2s. Unlike last year, when the IRS began accepting returns on January 29—closer to the January 31 deadline for employers to issue W-2s—this year’s earlier start may have left some taxpayers without the paperwork they needed.
On top of that, there’s a bigger storm brewing: the flood of 1099-K forms.
The 1099-K Effect: Gig Workers and Side Hustlers Take Note
A major tax change for 2024 has brought millions of new filers into the IRS’s sights. This year, third-party payment platforms like PayPal, Venmo, and Cash App must issue a 1099-K form if a taxpayer’s business transactions exceeded $5,000. In previous years, the threshold was a much higher $20,000 and 200 transactions, meaning many gig workers and side hustlers never had to report smaller amounts of income.
What does this mean? People who made money selling concert tickets, reselling items online, or picking up side gigs like food delivery may be seeing a 1099-K in their mailbox for the first time ever—and they’re unsure what to do with it. Some are choosing to hold off on filing until they fully understand their tax obligations.
Tax pros generally agree: waiting until you have all your documents is a smart move. The last thing you want is to file too early, then have to amend your return later because of missing income.
IRS Disruptions and a Political Tug-of-War
Even the IRS itself is facing some turbulence. A hiring freeze, rumored internal shake-ups, and a reported cost-cutting review by Elon Musk’s efficiency task force have added to the uncertainty. Musk himself ignited controversy earlier this month when he posted on X (formerly Twitter) that a new free IRS tax-filing tool, Direct File, had been axed. In reality, Direct File remains available in 25 states, though its expansion has been uneven.
Meanwhile, former President Donald Trump has been stirring the pot by openly questioning whether the IRS should be “audited into oblivion.” While these debates may make for lively headlines, they have little bearing on tax season right now.
Disaster Relief: Extensions for Some Taxpayers
If you live in California, Alabama, Florida, Georgia, North Carolina, South Carolina, or parts of Alaska, New Mexico, Tennessee, Virginia, or West Virginia, you may have until May 1 to file your 2024 taxes due to disaster relief extensions. In southern California, taxpayers affected by January’s wildfires have until October 15 to file and pay their federal taxes.
For those impacted, this additional time can be a financial lifeline. However, many taxpayers will still choose to file early to get their refunds as soon as possible.
Where’s My Refund? A Look at This Year’s Early Filings
Despite all the delays and confusion, plenty of people have already filed their returns. As of February 7, the IRS had received 23.58 million returns and processed 23.5 million of them. While early filing numbers are lower than last year, they’re steadily climbing as tax season progresses.
Matt Hetherwick, Chief Program Officer at the Accounting Aid Society in Detroit, says his nonprofit has actually seen an increase in tax return preparations compared to last year. Appointment scheduling is up, and so far, filers don’t seem concerned about refund delays.
“It is still very early in the filing season,” Hetherwick noted. “The earliest filers are just now getting their refunds.”
Final Takeaway: File Smart, Avoid the Misinformation Trap
If you’re eligible for a refund, there’s no real benefit to waiting to file—unless you’re missing critical paperwork, such as a W-2 or a new 1099-K. If you’re unsure about what forms you need, check your IRS account or consult a tax professional.
And don’t fall for online rumors that the IRS is going away or that new tax breaks will magically erase your tax bill. The safest strategy? File on time, file accurately, and check “Where’s My Refund?” for updates.
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