As tax season is in full swing, Americans are noticing a difference in the size of their tax refunds compared to last year. According to the Internal Revenue Service (IRS), the average tax refund issued through February 2, 2024, amounted to $1,395. This is significantly lower than the average refund of $1,963 during the same period in 2023.
Before jumping to conclusions, it's important to consider a few factors. This year, the tax season started a week later, on January 29, compared to January 23 in the previous year. As a result, the IRS has only processed 2.6 million refunds by February 2, 2024, compared to nearly 8 million during the same period in 2023.
Despite the discrepancy in refund numbers, the IRS has not expressed any concerns. In fact, they noted a 'strong start to filing season 2024, with all systems running well.' The IRS is anticipating more than 128.7 million individual tax returns to be filed by the April 15 deadline, and historically, around three out of four tax filers receive a refund.
For those eagerly awaiting their refunds, here's what you can expect. If you filed your taxes electronically and opted for direct deposit, the IRS estimates that your refund will likely be issued within 21 days. However, if you chose to mail a paper return, be prepared to wait four weeks or longer for your refund to process.
Luckily, the IRS has provided a tool called 'Where's My Refund' for taxpayers to track the progress of their refund. This allows you to stay updated on when you can expect to receive your much-anticipated refund.
While it's normal to hope for a substantial tax refund, it's worth considering whether it's better to receive a large lump sum or adjust your withholding throughout the year. Some financial experts suggest withholding less from your paycheck, resulting in a smaller refund but a higher monthly income overall.
Ultimately, the size of your tax refund depends on various factors, including your income, deductions, and withholding choices. It's essential to consult with a tax professional or utilize available resources to make informed decisions about your finances.
As tax season progresses, keep an eye on any updates or changes from the IRS. Additionally, stay informed about any changes in tax laws that may impact your filing status or eligibility for deductions. By taking these steps, you can ensure a smooth and informed tax-filing experience.
