Americans are pocketing bigger tax refunds this year, but fewer people are filing their taxes so far!
As the tax filing season kicks off, a curious trend is emerging: while the average tax refund Americans are receiving is noticeably larger than last year, the pace at which people are submitting their tax returns has slowed down. It's a bit of a mixed bag, and you might be wondering what's behind these shifts.
According to the latest data released by the IRS on a recent Friday, by February 6th, the average tax refund handed out to taxpayers stood at a healthy $2,290. Now, that's a significant jump! To put it in perspective, this is an increase of 10.9% compared to the same period last year, when the average refund was $2,065. So, if you're expecting a refund, it might just be a bit fatter this year!
But here's where it gets interesting: despite these larger payouts, the number of refunds issued has actually decreased. As of February 6th, over 7.4 million refunds had been sent out. This is 8.1% fewer than at the same point last year, when nearly 8.1 million refunds were disbursed. So, fewer checks are going out, but the checks that are going out are bigger.
And this is the part most people miss: While the number of individual refunds is down, the total amount of money being refunded has seen a slight increase of 1.9%. It has climbed from nearly $16.7 billion to almost $17 billion. This increase in the overall refund pool is what's contributing to the larger average refund size we're seeing.
For those who prefer the speed of digital transactions, the news is also positive. The average direct deposit refund has also seen a similar boost. This year, the average direct deposit refund is $2,388, which is 10.3% higher than the $2,165 average seen at this time last year.
Now, let's talk about the filing pace. The IRS data indicates that Americans are filing their tax returns at a more measured rate this season. As of February 6th, the IRS had received close to 22.4 million returns. This represents a 5.2% decrease from last year, when nearly 23.6 million returns had been processed by the same date.
Curious about your own refund? The IRS offers a handy online tool called "Where's my refund?" that allows taxpayers to track the status of their expected refund. Generally, for e-filed returns, it takes about 21 days to process a refund. However, if you mailed your return, it could take six weeks or more. Keep in mind that if your return requires any corrections or further review, the processing time could be extended.
A pro-tip for faster refunds: If you're preparing to file, setting up direct deposit with the IRS is highly recommended. It's generally the quickest way to get your money. Once your return is e-filed, you can often see its status within 24 hours using the "Where's my refund?" tool. This tool is also useful for checking refunds from the past two years.
But here's where it gets controversial... What if you made a mistake and need to amend your return? This process can add significant time to receiving your refund. Amended returns can take up to three weeks just to appear in the IRS system, and then up to 16 weeks to be fully processed. The IRS also has a dedicated "Where's my amended return?" tool for those who need to track these specific filings.
So, what do you think about these trends? Are you seeing a bigger refund this year, or are you holding off on filing? Let us know in the comments below – we'd love to hear your thoughts and experiences!
