As tax season is underway, the IRS is reporting that fewer Americans will receive a tax refunds this year.
As per data from the Internal Revenue Service, 44.5 million tax returns were submitted by February 23, showing a decrease of 3% compared to the previous year. Out of these returns, there were 28.9 million that included refunds, down from 35.1 million in the previous year.
According to the data, the U.S. workforce is expected to remain at a similar size in 2023 compared to 2022. This suggests that some individuals are choosing to have a smaller portion of their income deducted from their paychecks instead of receiving a tax refund in the spring.
The IRS has reported a total of $92.9 billion has been refunded during the tax season as of Feb. 23. This amount is lower compared to last year’s refund of over $108 billion by the same time.
In the initial weeks of tax season, there has been a decrease in the number of individuals requesting refunds. However, there has been an increase in the average refund amount compared to last year. According to the IRS, the average refund this year is $3,213, which is higher than the previous year’s average of $3,079.
During the tax season of 2021, which covered the income earned during 2020, the IRS distributed $365 billion in refunds. This amount was higher than the previous year’s refunds, which totaled $320 billion.
As tax season 2022 came to a close, a total of $359 billion in refunds were distributed. However, for the 2023 tax season, the amount of tax refunds decreased to $334 billion.
The tax seasons of 2021 and 2022 were significantly impacted by various government initiatives designed to offer financial relief to Americans during the pandemic. These included multiple rounds of direct payments and an extended child tax credit.
According to the IRS, individuals who opt for direct deposit can typically receive their tax refund within 21 days, as long as their tax return was correctly submitted. For those who have already filed their taxes and are curious about the estimated arrival date of their refund, they can visit the IRS’ website for more information.
