The IRS has already processed over 2.6 million refunds, amounting to roughly $3.65 billion, as of February 2, according to the agency’s recent report. The average refund currently stands at $1,395, a significant decrease from last year’s average of $1,963 at the same time – a drop of about 29%.
This decrease, however, is based on data from just five days since the start of the tax season on January 29, compared to a 12-day period last year. The IRS views this as a promising start to the 2024 filing season. Mark Steber, Jackson Hewitt’s chief tax information officer, urges caution in interpreting these early figures as indicative of the entire tax season, which spans over three and a half months.
As of December 29 last year, the average refund for the 2023 filing season was $3,167, as per IRS records. Steber notes that many early filers, including those eligible for earned income tax credits and child tax credits, have yet to submit their returns. The IRS states that refunds for filers claiming these credits will not be issued before February 27 due to legal requirements.
Larger tax refunds may be on the horizon for some, Steber suggests, particularly due to the effects of high inflation. If your income didn’t rise in line with inflation in 2023, you might be eligible for a larger refund. This is because of IRS adjustments for inflation, including increased federal tax brackets and standard deductions.
Steber anticipates substantial refunds this year, despite the slow start. Meanwhile, despite pending tax legislation in Congress that might retroactively enhance the child tax credit for 2023, potentially increasing refunds for some filers, the IRS advises ready taxpayers to file without delay. IRS Commissioner Danny Werfel, in a January press call, encouraged timely filing and advised not to wait for Congress’ decisions.
A January survey by IPX1031, an investment property exchange service, found that nearly half of the taxpayers are planning to file in March or later, with the complexity and stress of tax filing cited as primary reasons for the delay.
