The Internal Revenue Service (IRS) has announced that over 2.6 million refunds, totaling approximately $3.65 billion, have been issued. The average refund for the 2024 tax season is $1,395, down by about 29% compared to the previous year. However, the current data for the tax season is only based on five days, in contrast to 12 days from the previous year, making it too early to draw any significant conclusions or predictions. Mark Steber, Jackson Hewitt’s chief tax information officer, has urged caution in interpreting the data, emphasizing that it’s important not to read too much into the initial information as it is only a preliminary snapshot.
Steber explained that many early filers, like earned income tax credit and child tax credit recipients, are yet to file, and that the average refund for the 2023 season totaled $3,167. However, filers claiming the refundable portion of the child tax credit or earned income tax credit won’t receive their refunds until Feb. 27 at the earliest, according to the IRS. Despite a complexity and stress, tax filers are encouraged not to wait on Congress before they submit their returns and to file when ready. IPX1031’s January survey showed that nearly half of taxpayers don’t plan to file until March or later, citing complexity and stress as the top reasons for delaying.
With the tax season just getting underway, it is too early to draw any meaningful conclusions from the preliminary data. Despite the decrease in average refunds compared to the previous year, the IRS emphasizes that the initial statistics suggest a “strong start to filing season 2024.” As the season progresses, the IRS anticipates that the refunds will be healthy, partially due to higher inflation and IRS inflation adjustments from the previous year. Meanwhile, there is pending tax legislation in Congress that could boost the child tax credit for 2023, potentially increasing refunds for certain eligible filers, but taxpayers are encouraged not to wait on Congress and file when ready.