Refunds Up 11%, But Clients Are Filing Less: The Early Season Slowdown Nobody Expected

[tax_tina]

I’m seeing something strange in my Phoenix tax practice this year, and I’m wondering if others are experiencing the same thing.

The numbers don’t make sense: IRS data shows average refunds are up 11% in 2026 (now averaging $3,742 compared to $3,382 last year). That’s real money—a mortgage payment for most people, two months of groceries, or a badly needed car repair.

But fewer people are filing early. Total refunds issued are down 5.1% through mid-February. My own practice confirms this: I’m seeing 30% fewer completed returns in January-February compared to last year, even though I have the same number of clients.

The Cash Flow Problem

I had a conversation last week that captured this perfectly:

Client: “I really need that refund check—daycare costs are killing us.”
Me: “Your Beancount records show you’re getting about $3,800 back. When can you get me your W-2s?”
Client: “Oh… I’ll get to that soon.”

The money is sitting there waiting for them, but they’re not filing. It’s creating a cash flow problem for clients who could really use that liquidity right now, not in April.

The Workload Problem

For CPAs, this creates a predictable disaster: Instead of smooth January-February volume, we’re heading toward a March-April tsunami. The work hasn’t gone away—it’s just concentrated into fewer weeks.

And this year, we’re dealing with the IRS staffing crisis—they’ve lost 27% of their workforce (down from 102K employees to 74K). That means longer processing times, worse phone support, and more manual review delays for complex returns.

The Beancount Advantage

Here’s what I’ve started doing with clients who maintain Beancount ledgers:

Quick Refund Estimates: I can run a Fava query on their year-end Beancount file and generate an estimated refund in about 10 minutes. When I call and say “you’re getting back approximately $3,500,” suddenly they find time to dig up their W-2s.

The psychological shift is huge: “I might get a refund” vs “You’re getting $3,500” creates urgency.

Scenario Modeling: For procrastinating clients, I’ll show them scenarios:

• “If you file by Feb 15, you’ll likely see your refund by March 1.”
• “If you file in late March during the rush, expect your refund in late April or early May.”

With the IRS understaffed, early filing really does mean faster refunds. That time-value-of-money argument works for clients who need the cash now.

Questions for the Community

1. Are you seeing the same delayed filing pattern? Is this a regional thing or widespread?

2. What strategies are you using to motivate early filing? Early bird discounts? Deadline-based pricing? Urgent communications?

3. For Beancount users: How are you using ledger data to create urgency? Anyone built automated “your estimated refund is…” reports?

4. Capacity planning: Are you turning away late filers because you’re at capacity? How do you decide when to say no?

The refund money is bigger than ever, but clients aren’t claiming it. We need to figure out how to help them help themselves—and manage our own workload sanity in the process.

What’s working for you this tax season?

[bookkeeper_bob]

@tax_tina You’re describing my exact experience! I handle books for 20+ small business clients in Austin, and I’m seeing the same delayed filing pattern. It’s baffling—bigger refunds should mean faster filing, but that’s not what’s happening.

What’s Working: The Early Bird Discount

I implemented an “Early Bird Special” this year and it’s been surprisingly effective:

$100 discount for clients who submit all documents by February 15th.

The deadline creates urgency without being pushy. I send three reminders:

• January 5: “Early Bird discount available—submit by Feb 15 for $100 off”
• January 25: “Three weeks left to claim Early Bird discount”
• February 10: “Last 5 days for Early Bird pricing”

Results: 40% of my clients filed early this year compared to only 20% last year. That’s doubled my early filing rate, which means smoother workload distribution and happier clients who get their refunds faster.

The Beancount Workflow That Supports This

The discount only works because I can process returns quickly for clients who maintain their books in Beancount. Here’s my workflow:

1. Year-round bookkeeping: Clients send me bank statements monthly, I update their Beancount ledger
2. Automated tax position reports: Every month, they get an email showing YTD income, expenses, estimated tax liability/refund
3. December preview: By mid-December, I send a “Tax Preview” report showing their approximate refund
4. January urgency: When they see “$3,500 refund waiting” + “$100 discount ending Feb 15,” they act

The psychology is important: People respond to concrete deadlines (Feb 15) and visible money ($100 discount + $3,500 refund). Vague “you should file early” doesn’t work. Specific numbers and dates do.

What About Late Filers?

I’m also dealing with the flip side: What to do about clients who don’t file early?

This year, I’m trying tiered pricing:

• Submit by Feb 15: Base rate ($500) minus $100 Early Bird = $400
• Submit Feb 16-Mar 15: Base rate $500
• Submit Mar 16-Apr 10: Rush rate $600

I’m transparent about why: Late submissions disrupt my workflow, require overtime, and force me to turn away new clients during peak season. The rush fee compensates for that.

So far, clients understand. Nobody’s complained about the pricing structure, and several said “that’s fair—you’re incentivizing good behavior.”

The Capacity Question

@tax_tina, you asked about capacity planning. I’ve learned the hard way: You can’t do everyone’s return in March.

Last year, I tried to accept all clients regardless of when they submitted. By April 10, I was working 80-hour weeks, making mistakes from exhaustion, and my family barely saw me.

This year: Hard cap of 15 returns per week, no exceptions. When I hit capacity, I tell late clients: “I’m fully booked. I can file an extension for you and complete your return in June, or I can refer you to another bookkeeper.”

About half choose the extension (which is fine—they still get their refund, just later). The other half find someone else. Either way, I protect my sanity and deliver quality work for the clients I do accept.

Question for You

How are you pricing early vs late filing? I’m still figuring out the right discount/penalty structure. Is $100 enough to motivate behavior change, or should it be bigger?

[accountant_alice]

This discussion is hitting on something really important that I think extends beyond just client behavior—it’s also about the IRS infrastructure crisis we’re operating within this year.

The Staffing Context Nobody’s Talking About

The IRS entered 2026 with 74,000 employees, down from 102,000 at the start of 2025. That’s a 27% workforce reduction in one year. For perspective:

• Phone service level target dropped from 85% to 70%
• Average wait times are now 45+ minutes (when you can get through)
• Manual review backlog growing
• Complex return processing significantly delayed

What this means for us: Later filing doesn’t just delay client refunds—it significantly increases the risk of longer processing times.

When clients file in late March during the peak rush, their returns hit the IRS alongside millions of others. With reduced staff, those processing delays compound. Early filers genuinely do see faster refunds this year.

The Downstream Effects on CPAs

@bookkeeper_bob, your capacity planning approach resonates with me. I’ve had to make similar tough calls this year.

But there’s an ethical dimension I’m wrestling with: How hard should we push clients to file early?

On one hand:

• It’s better for our workflow
• It’s better for their cash flow (faster refunds)
• It reduces errors from rushing

On the other hand:

• Some clients are legitimately waiting on late K-1s (partnerships file by March 15)
• Others have complex situations requiring careful review
• Pushing too hard feels like prioritizing our convenience over their needs

My Staged Reminder System

I’ve settled on a middle ground that respects client agency while creating urgency:

January 15 (Gentle): “Tax season is open! We’re accepting returns now. Early filers typically see refunds within 2-3 weeks.”

February 1 (Informative): “Just a reminder—with IRS staffing challenges this year, early filing means faster processing. Let us know if you need help gathering documents.”

February 15 (Urgent + Incentive): “Last call for early filing discount! Submit by Feb 20 for off. After Feb 20, standard pricing applies.”

March 1 (Capacity Warning): “We’re approaching capacity for pre-extension returns. If you need filing by April 15, please submit documents by March 10.”

March 10 (Extensions Offer): “We’re now recommending extensions for complex returns. This avoids rush errors and gives us time for thorough review. Your refund timing is similar (late April either way), but return quality is higher.”

The Beancount Advantage for Boundary-Setting

@tax_tina, you mentioned using Beancount for quick estimates. I’ve found another benefit: version-controlled proof of when clients submitted vs when we received documents.

With clients who complain about turnaround time, I can show:

• “You submitted W-2s on March 28”
• “We completed your return on April 2”
• “That’s a 5-day turnaround during our busiest week”

The git log doesn’t lie. It protects us from “you’ve had my documents for months” claims.

For clients maintaining their own Beancount ledgers year-round, the transition from books to tax return is nearly automatic. That’s the real competitive advantage—not just faster processing, but prepared-throughout-the-year clients who don’t experience tax season panic.

Question for the Community

How do you balance client service (accepting everyone, being flexible) with professional sustainability (protecting your capacity, maintaining quality)?

I used to feel guilty turning away work. Now I see it as professional responsibility—better to do 50 returns excellently than 80 returns poorly.

[helpful_veteran]

This is a great discussion, and I want to add a slightly different perspective from someone who’s been using Beancount for 4+ years now and has observed several tax seasons.

This Year Feels Different

I track my own finances and help a few friends with theirs, so I’m not dealing with the same client volume as @tax_tina, @bookkeeper_bob, or @accountant_alice. But I’m seeing the same pattern in my personal network.

Usually, refund size drives filing urgency. People who expect big refunds file early. People who owe money delay. That’s the normal pattern.

This year, that correlation seems broken. I know multiple people expecting $3K+ refunds who still haven’t filed as of mid-March. When I ask why, the answers are:

1. “The new tax law is confusing” - The One Big Beautiful Bill Act changed a lot of deductions and credits. People are overwhelmed and avoiding the complexity.

2. “I’m not sure what I need” - Do they need to report tip income differently? Do they qualify for the new overtime exemption? The auto loan interest deduction? They’re paralyzed by uncertainty.

3. “I’ll do it this weekend” - Classic procrastination, but amplified by tax anxiety.

What Actually Works: The Tax Preview Service

Four years ago, when I migrated my finances from GnuCash to Beancount, I started offering a simple service to friends: Tax Preview consultations.

What it is: A 30-minute video call in mid-January where I:

1. Import their W-2s and 1099s into a quick Beancount file
2. Run basic tax calculations (standard deduction, rate tables, withholding)
3. Show them: “Based on these numbers, you’re getting approximately $X back”
4. List what additional documents I need (mortgage interest, donations, etc.)
5. Give them a timeline: “If you get me everything by Feb 1, I’ll have your return filed by Feb 7”

What I charge: $150 for 30 minutes. It’s intentionally affordable but not free.

Results: About 70% of people who do the Tax Preview file within 2 weeks. The other 30% at least know what to expect and aren’t surprised when they eventually file.

The Psychology of “Knowing”

@bookkeeper_bob mentioned the power of specific numbers and deadlines. I completely agree. But there’s something deeper: People avoid tasks when the outcome is uncertain.

Filing taxes when you don’t know if you’ll owe or get a refund feels risky. You’re opening Schrödinger’s box—could be good news, could be bad news.

But when someone tells you “You’re getting $3,400 back,” the task shifts from scary unknown to claiming money that’s yours. The psychological frame changes completely.

Beancount makes this preview service possible because:

• I can build a quick ledger from documents in under an hour
• The calculations are transparent (client can see the logic)
• I can model scenarios: “If you donate $500 before year-end, your refund increases to $3,550”

A Note on Patience and Empathy

@accountant_alice asked about the ethics of pushing clients to file early. I think this is where community values really matter.

Yes, early filing is better for workflow. Yes, clients benefit from faster refunds. But also: Tax filing is genuinely stressful for most people.

Those of us who track every transaction in Beancount year-round are weird (in a good way!). We’ve conquered the complexity. For most people, taxes represent:

• Financial judgment (“Did I save enough? Spend too much?”)
• Complexity anxiety (“What if I miss something and get audited?”)
• Loss of control (“The government takes my money and I hope they give some back”)

So when clients delay, it’s not always laziness or poor planning. Sometimes it’s legitimate anxiety.

The best approach: Create systems that reduce anxiety (Tax Previews, clear deadlines, reassuring communication) rather than systems that increase pressure.

Encouragement for the Community

To the professionals here managing the March crunch: You’re doing important work, and setting boundaries is professional, not selfish.

To the Beancount users building their own systems: You’re already ahead of 95% of taxpayers by having year-round visibility.

To anyone feeling overwhelmed this tax season: Start simple. You don’t need a perfect system. You need a system that works for you.

And remember: The IRS deadline is April 15, but extensions exist for good reasons. If rushing creates mistakes, slow down. An accurate return filed in June is better than an error-filled return filed in April.

Stay sane out there, everyone. We’re all in this together.