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Why are tax refunds smaller this year?

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Many people who have already filed their taxes this year are getting smaller refunds.

According to statistics recently released by the IRS, the average refund amount is down 11% from a year ago. The IRS says the average refund this year is $2,903, which is down from $3,263 a year ago.

Through March 24, 80.6 million tax returns have been filed, which is down about 0.8% from the same time a year ago.

The total amount refunded by the IRS through March 24 was $172 billion, which is down 8.7% from this time a year ago.

Although average refunds are smaller, more Americans are getting some sort of refund. Over 59.3 million people have claimed a refund on their return through March 24, which is up from 57.8 million at the same time last year.

It also appears more Americans are opting to have professionals prepare their taxes. The IRS said the number of e-returns prepared by professionals is up 1.9%, while self-prepared electronic returns are down 2.7%.

One reason for the smaller average tax refunds is that 2022 did not include the type of economic stimulus seen in 2020 and 2021. Although Americans were able to obtain the expanded child tax credit and stimulus checks prior to tax season, many could claim those funds during tax season.

Also, many non-filers were able to access stimulus checks by sending in tax returns.

Most taxpayers have until April 18 to file a tax return. Those who are unable to file a return can file an extension, which gives them until Oct. 15 to file a return. The IRS notes that filing an extension “does not grant you any extension of time to pay your taxes.”

By Justin Boggs, Scripps News.

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Scripps News

Scripps News delivers compelling, context-driven news, fact-based reporting and a deeper look at the "why" of each story with objective, impactful storytelling. Scripps News is available over-the-air 24/7 and on leading connected TV platforms. More.

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