According to the latest data from the Internal
Revenue Service (IRS), tax refunds are still
smaller compared to the same time last year.
Additionally, the IRS has distributed fewer
refunds this year than in 2022, with less than a
week left in the filing season.
As of April 7, the average refund amount was
$2,878, which is a 9.3% decrease from the
$3,175 average refund during the same period
last year. This is based on nearly 69.1 million
refunds that the agency has distributed this
year, which is down by 1.3% from the 70
million refunds disbursed last year.
According to the data, 68.8% of processed
returns have yielded a tax refund so far this
year, down from 70.2% last year. Throughout
this tax season, the average refund has
consistently been lower than last year based
on the weekly filing statistics.
These figures highlight how the loss of several
pandemic-era tax breaks has resulted in a
smaller cash infusion for many American
families, which is often crucial. It's important
to note that the impact of the pandemic on the
economy may also be contributing to this
decrease in tax refunds. Regardless of the
reason, it's essential to carefully consider how
these changes could affect your finances and
plan accordingly.
Good-bye pandemic tax breaks:
This tax season, the Child Tax Credit (CTC),
Earned Income Tax Credit (EITC), and Child
and Dependent Care Credit have returned to
pre-COVID levels. This means that the amount
taxpayers receive for these credits has
decreased from last year.
For instance, last year taxpayers received
$3,600 per child dependent for the CTC, while
this year, they receive $2,000. The maximum
amount of EITC that single filers with no
children are eligible for this year is $500, down
from $1,502 last year. Similarly, the Child and
Dependent Care Credit, which covers out-of-
pocket expenses for child care and day camps,
has decreased to $2,100 this year from last
year’s $8,000.
It's worth noting that the loss of above-the-
line charitable deduction and the expiration of
the mortgage insurance premium deduction
may have also played a role in lower refunds
this year. Regardless of the reasons for the
decrease in tax refunds, it's important to be
mindful of how these changes could impact
your finances and plan accordingly.
A smoother tax season:
The Internal Revenue Service (IRS) has
received 101 million individual tax returns out
of the expected 168 million this year, which is
nearly consistent with the number received at
this time last year. However, the percentage of
received returns that the agency has processed
is higher than a year ago. As of April 7, the IRS
had processed over 100 million tax returns,
indicating a slight increase of 0.6% compared
to the same period last year when it had
processed 99 million returns.
Furthermore, it appears that this tax season
has been relatively smoother, as visits to the
IRS website are down 20.9% compared to last
year. This decrease in website traffic could
suggest that taxpayers have encountered fewer
issues and questions when filing their tax
returns this year.
It's important to note that despite the
apparent smoothness of this year's tax season,
there are still several factors to consider, such
as the decrease in tax refunds and the changes
to tax credits. As always, it's crucial to stay
informed and aware of any updates or changes
that could impact your taxes and finances.
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