As the 2023 tax season rolls forward, the Internal Revenue Service is offering taxpayers a preview of their likely refund amount. This week, the IRS declared that by February 3rd it had released around 8 million refunds worth a total of $15.3 billion. The typical refund check for this year has seen a decline of 11% and is currently valued at $1,963 according to Fox Business.
The IRS had earlier alerted taxpayers to prepare for a feeble tax refund this year. This is partially because there are not any stimulus payments. However, in 2021 they released a third set of financial aid totaling up to $1,400 per individual who qualified. Luckily anyone entitled could claim these unpaid funds when filing their taxes returns.
The IRS released a news statement in November to help individuals prepare for the upcoming tax season. “Refunds may be smaller in 2023,” they explained. “Taxpayers will not receive an additional stimulus payment with a 2023 tax refund. This is because there were no economic impact payments for 2022.”
How to help predict your tax refund amount
Generally speaking, if you paid too much into your taxes the prior year, then a generous tax refund is likely in order. In fact, last year almost three-quarters of all taxpayers received a financial windfall. There was an average payment amounting to approximately $3,176 – that’s up from 2021 when it was around $2,800.
Millions of people rely on the influx of their refund money from Uncle Sam. They use it to make life-altering purchases, save for retirement, or pay off debt. As a result, any decrease in size can be concerning. In 2022 alone, according to LendingTree’s survey results, nearly half indicated that they count on these funds as financial padding.
“These tax refunds can help folks build that cushion up again, protecting them from needing to rely on credit cards and other loans for a while longer,” LendingTree chief credit analyst Matt Schulz explained back then.
More Americans are filing their taxes early this year
This year, the IRS has been inundated with 19 million returns – a mind-blowing 30% more than last year. The reason might be that “individuals are filing their returns sooner this year to get refunds faster given the tougher economic environment,” explained Bank of America analysts.
As Americans grapple with the most extreme inflation trajectory since the 1980s, consumer prices have taken a break from their relentless acceleration. However, they still remain more than three times higher compared to pre-pandemic levels.
This year’s tax-filing deadline is Tuesday, April 18th. While you may be granted an extension from the IRS to submit your taxes, it is critical that all money due to Uncle Sam must be paid by then. Otherwise, additional fees and interest will accrue.