Thus far in 2024, tax refunds to Americans have decreased on average.
The IRS claimed in a release that the average refund issued up until February 2nd was $1,395 in total. At this time last year, the average refund was $1,963.
What’s the meaning behind it? Perhaps nothing. This year’s tax season began on January 29, as opposed to January 23, 2023. In other words, through February 2, the agency only granted 2.6 million refunds. It had processed close to 8 million at the same time last year.
With its statement announcing “a strong start to filing season 2024, with all systems running well,” the IRS did not raise any red flags.
Chicago CPA Daniel Rahill suggested possible explanations for why early filers might have had lesser refunds this year:
- Some employees might have received pay raises in 2023 but did not accelerate their tax withholding, which could have resulted in a lesser refund.
- Even though “gig” workers would have made more money, their estimated tax payments may not have increased, which would have reduced their refunds.
- Furthermore, a robust stock market may have resulted in increased investment income for certain filers, leading to a rise in taxes.
“It will be an interesting analysis to see where the next wave of numbers come in once we receive more tax filing data,” he wrote in his email.
When 2024 tax returns are expected
By the deadline of April 15, the IRS anticipates receiving more than 128.7 million individual tax returns. Three of every four tax filers receive a refund on average.
What to expect if you filed your return and want to get a refund is as follows:
According to the IRS, if you filed electronically and selected direct deposit, your refund should arrive in the mail in about 21 days. You could have to wait up to four weeks if you mailed a paper return.
