Through the first month of tax filing, fewer Americans are claiming tax refunds this season.
According to Internal Revenue Service data, 44.5 million tax returns were filed through Feb. 23, which is down by 3% from the previous year. Of the returns, there have been 28.9 million returns containing refunds, which is down from 35.1 million a year earlier.
With the U.S. workforce nearly the same size at the end of 2023 as it was in 2022, the data would indicate that some Americans are opting for less money to be taken out of their paychecks rather than receiving a return in the spring.
The IRS says that $92.9 billion in refunds have been issued from the start of the tax season through Feb. 23. Last year, by the same time, over $108 billion had been refunded.
Despite fewer people claiming refunds in the early weeks of tax season, average refunds are higher this year. The IRS says the average refund is $3,213, which is up from $3,079 a year ago.
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Tax refunds have somewhat normalized after a huge jump for the 2021 tax season due to the COVID-19 pandemic.
In tax season 2021, which accounted for income earned in 2020, the IRS issued $365 billion in refunds. The prior year, $320 billion in refunds were issued.
By the end of tax season 2022, $359 billion in refunds were issued. Total tax refunds for the 2023 tax season dropped to $334 billion.
The 2021 and 2022 tax seasons were heavily influenced by numerous government pandemic-era programs intended to provide Americans with stimulus. Among them were several waves of direct payments from the government and an expanded child tax credit.
The IRS said that those who utilize direct deposit will generally get their return within 21 days, assuming a return was properly filed. If you have filed your taxes and want to know when to expect a return, you can check on the IRS' website.
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