28.9% Drop: Average Tax Refunds Plummet to $1,395 in 2024, IRS Data Reveals – What to Know!

Average Tax Refunds Drop 28.9% to $1,395 in 2024

Average Tax Refunds Shift to Smaller Refunds in Taxpayer Finances for 2024

Average tax refunds this year are notably smaller compared to last year according to early data from the Internal Revenue Service (IRS). By February 2nd the average tax refunds amount stood at $1,395 a steep drop of 28.9% from the same period last year where it was $1,963. This information is based on nearly 2.6 million refunds issued this year a significant decrease from the 7.9 million average tax refunds issued by the same time last year, according to AOL. It’s important to note that this year’s statistics are based on just five days of data as the filing season started later on January 29th compared to January 23rd last year. This means that the average tax refunds amount may change as more returns are processed.

The government makes a rule that says refunds for certain tax credits like the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) have to wait until around mid-February. If you’re getting these credits and chose direct deposit you’ll probably get your refund by February 27th if everything’s okay with your tax return. Experts think that the reason some Americans are getting smaller refunds this year is because the government changed the rules back to how they were before the pandemic. The average tax refund was about $3,167, based on almost 163 million tax returns but experts say that getting a big tax refund might not always be the best thing. It could be better to have that money in your paycheck throughout the year. You can do this by adjusting how much tax gets taken out of your paycheck on your W-4 form.

READ ALSO: $1.78 Billion Fiscal Year 2025 Budget Approved For Baltimore City Schools Amid CEO Contract Uncertainty: $42 Million Increase Allocated For Academic Improvements

28.9% Drop: Average Tax Refunds Plummet to $1,395 in 2024, IRS Data Reveals – What to Know!(PHOTO: rtuexam.net)

Impact on Household Finances and Financial Stability

Furthermore, last year saw the child tax credit and earned income tax credit revert to pre-COVID levels resulting in less money returned to taxpayers. For some households smaller refunds could pose a challenge especially those who rely on this money to bolster their financial situation. According to a survey, Americans used their tax refunds last year to boost their savings, reduce debt, and cover essential household expenses. The decrease in refunds this year could potentially impact individuals and families who depend on this extra money for financial stability. In summary, early IRS data indicates a significant decrease in average tax refunds compared to last year possibly due to changes in tax credits and delayed processing of certain refunds. This could have implications for households relying on tax refunds to manage their finances.

READ ALSO: Gold And Silver Soar: Inflation Data, Dollar Weakness, And Rate Cuts Fuel Rally To New Heights