The Internal Revenue Service (IRS) is dampening the hopes of Americans expecting a tax refund similar to last year’s check in 2024.
Early data released by the IRS indicates that taxpayers may receive significantly smaller refund checks compared to last year.
As of February 3, 2024, the average tax refund was $1,963, while during the same period in 2023 it amounted to $1,395—a substantial decrease of 29%. However, the IRS has attempted to alleviate concerns regarding this concerning trend.
The agency pointed out that as more returns are processed, the average refund amount could potentially increase. Additionally, they reassured taxpayers that all systems are functioning smoothly.
“Because the 2023 filing season began on Jan. 23, the IRS had been receiving returns for 12 days by Feb. 3, 2023; compared to only 5 days for the 2024 filing season, which opened on Jan. 29. Considering the loss of 7 days in this comparison, filing season statistics below show a strong start to filing season 2024, with all systems running well,” the Internal Revenue Service noted.
From February 3, 2023, until February 2, 2024, the number of tax refunds increased to over 2.6 million, resulting in a total value of $3.6 billion. In comparison, by February 3, 2023, around 8 million tax refunds had been issued with a combined worth of nearly $15.7 billion.
Fox Business reported, “Nearly three-quarters of filers received a tax refund in 2023, with an average payment worth about $3,176, down about 3% from the previous year.”
Despite efforts, Americans continue to struggle with the distressing impact of inflation on their finances. As stated by Investopedia, inflation has increased by 7% in 2021, followed by rises of 6.5% in 2022 and 3.4% in 2023.
Interestingly enough, this detrimental inflationary trend might unexpectedly bring some advantages to taxpayers.
CBS MoneyWatch reported, “That’s because the IRS adjusted many of its provisions in 2023 for inflation, pushing the standard deduction to a more generous level and raising its tax brackets by 7.1% — a historically large adjustment.”
Mark Steber, chief tax information officer at Jackson Hewitt, told the outlet, “Say your income didn’t keep pace with inflation — you made the same as the prior year but didn’t increase your income by that inflation rate of 7% or so — you could see a better refund. We are predicting a higher…
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