A Sluggish Start to the 2025 Tax Filing Season: What You Need to Know

Introduction: Understanding the Initial Trends

The 2025 tax filing season got off to a slow start, with data from the second week (ending February 7, 2025) indicating that taxpayers are not rushing to file their returns. Compared to the previous year, the number of tax returns received by the IRS has dropped significantly, and this trend is raising questions about why taxpayers are delaying their filings. This summary will break down the key data, explore possible reasons for the slowdown, and provide insights into what taxpayers can expect in the coming weeks.

The Data: A Deeper Dive into the Numbers

The IRS has reported a nearly 8% decline in tax returns received during the second week of the 2025 filing season compared to the same period in 2024. This follows a 14% drop in the first week. As of February 7, 2025, the IRS had received 23,589,000 individual income tax returns, down from 25,553,000 in 2024. This represents a significant downturn, especially when compared to the 2023 filing season, which saw an 18% drop from the previous year.

The slowdown is not limited to the number of returns filed. Visits to the IRS website have also decreased sharply, with a 40.9% drop compared to 2024. As of February 7, 2025, the IRS reported 93,763,000 visits to IRS.gov, down from 158,617,000 during the same period in 2024. Additionally, the IRS has processed fewer returns, with 23,515,000 processed as of February 7, 2025, compared to 25,443,000 by February 9, 2024—a decrease of 7.6%. While the average tax refund has increased by 18.6% (from $1,741 to $2,065), the number of refunds issued has also risen, with 8,054,000 refunds issued in 2025 compared to 7,483,000 in 2024, an increase of 7.6%.

Possible Reasons for the Slowdown: More Than Just a Seasonal Trend

The IRS has attributed the slowdown to typical seasonal patterns, stating that filing numbers tend to even out as the April deadline approaches. However, there are several factors that suggest the decline may be more than just a temporary trend. For one, the IRS is currently without a permanent Commissioner, and the acting Commissioner has not yet addressed taxpayers. Additionally, a hiring freeze implemented by the Trump Administration has led to the rescission of existing job offers, which could impact the agency’s ability to process returns efficiently.

Moreover, there have been concerns about taxpayer privacy and data security. Reports that Elon Musk’s Department of Government Efficiency (DOGE) was granted access to sensitive financial data within the Treasury Department, including Social Security numbers, have raised alarms. While a temporary restraining order has been put in place to limit this access, the initial breach has likely eroded taxpayer confidence. These concerns, coupled with the uncertainty surrounding potential changes to tax laws and enforcement, may be contributing to the reluctance of taxpayers to file early.

The Impact on Tax Refunds and Processing Times

Despite the slowdown in filings, the average tax refund has increased significantly. As of February 7, 2025, the average refund was $2,065, up from $1,741 in 2024—an increase of 18.6%. Refunds issued via direct deposit have seen an even larger boost, rising to $2,165 in 2025 compared to $1,831 in 2024. However, taxpayers who qualify for the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) may face delays in receiving their refunds. The IRS is required by law to hold these refunds until mid-February, meaning that many eligible taxpayers will not see their refunds until early March, after the Presidents’ Day holiday.

The Road Ahead: Challenges and Expectations

As the tax filing season progresses, several challenges remain. The IRS must contend with the ongoing hiring freeze and the lack of leadership, both of which could impact its ability to process returns and address taxpayer concerns. Additionally, the agency must work to rebuild trust with taxpayers in the wake of the DOGE data access controversy. Taxpayers, meanwhile, should be prepared for potential delays, especially if they are eligible for the EITC or ACTC. It’s important to stay informed and check the IRS website regularly for updates, as the situation is likely to evolve in the coming weeks.

Conclusion: Staying Informed and Preparing for the Unexpected

The 2025 tax filing season is shaping up to be one of the most unpredictable in recent memory. With significant changes in filing numbers, refund amounts, and taxpayer confidence, it’s more important than ever for taxpayers to stay informed. As the IRS works to address the challenges it faces, taxpayers should remain vigilant and proactive in monitoring their returns and refunds. Only time will tell if the filing numbers will rebound as the April deadline approaches, but for now, it’s clear that this is a tax season unlike any other.