The 2021 tax filing season brought significant changes to individual income tax returns that captured public attention. Comparative data reveals notable trends when examining filings from 2021 against the previous year's figures. This analysis explores these statistics to provide clarity about the dynamics of this tax season.

Overview of 2021 Tax Filing Data

According to statistics released by the Internal Revenue Service (IRS), as of March 26, 2021 (day 43 of the filing season), key metrics showed distinct variations compared to day 61 of the 2020 season. Below are the primary comparisons between the two years regarding total filings, processing status, and refund data.

  • Total filings received: 85,005,000 in 2021, marking a 6.2% decrease from 2020's 90,617,000, suggesting reduced filing activity.
  • Processed returns: 75,971,000 in 2021, down 12.7% from 87,001,000 in 2020, indicating slower processing efficiency.

The Shift Toward Electronic Filing

Electronic filing continues to dominate modern tax preparation, though 2021 saw some interesting variations:

  • Total e-filings: 80,835,000 in 2021, a 5.5% drop from 85,559,000 in 2020.
  • Professional-prepared returns: 39,926,000 in 2021, decreasing 10.3% from 44,501,000, potentially signaling more self-preparation.
  • Self-prepared returns: Remained stable at 40,909,000 (2021) versus 41,058,000 (2020).

Changing Patterns in Online Engagement

A striking development was the dramatic increase in IRS website traffic, highlighting taxpayers' growing reliance on digital resources:

  • Website visits: Soared to 991,159,000 in 2021 (up 151.1% from 394,715,000), demonstrating unprecedented demand for online tax information.

Analyzing Refund Trends

Refund statistics—always a focal point for taxpayers—showed these notable changes:

  • Total refunds issued: 56,494,000 (down 19.2% from 69,931,000), raising concerns about reduced refund availability.
  • Total refund amount: $16.392 billion (19.4% decrease from $20.338 billion).
  • Average refund: $2,902 (only 0.2% lower than 2020).
  • Direct deposit refunds: 53,152,000 (10% decrease), though still representing the dominant distribution method.

Conclusion

The 2021 tax season presented distinct patterns in filing volume, processing efficiency, and refund distribution compared to previous years. While these changes affected taxpayers' experience, the data also reveals how Americans are adapting to new circumstances and leveraging technology for tax preparation. This analysis aims to provide valuable insights for making informed financial decisions during future tax seasons.