Tax season can be a confusing and overwhelming time, but it brings hope of getting a sizable tax refund for your efforts. The good news is that so far, taxpayers who file early are getting bigger refunds, on average, than last year.
New data from the IRS shows that just weeks into tax season, the average filer receives a tax refund amount of $3,213, an increase of more than $100 compared to the same time last year. It appears the larger refunds are the result of tax bracket changes implemented after the 2023 filing season.
This year the average tax refund has been higher so far
According to the IRS, nearly 44.6 million taxpayers have filed tax returns so far in 2024. Of those, nearly 29 million have received a refund. The IRS has already refunded a total of about $93 billion this tax season, and the average tax refund is $3,213 — an increase of $134 compared to the average 2023 refund of $3,079 at this time of year last.
The reason for this year’s increase has a lot to do with the IRS’s annually adjusted tax brackets and the standard deduction. Due to rampant inflation last year, the agency increased its standard deduction by more than 7 percent to $13,850 for individual filers. This historically high annual increase allows filers to reduce their taxable income quite significantly compared to last year. Additionally, those who were on the low end of their tax bracket last year may have fallen into a lower pay bracket due to the increase in the standard deduction, especially if their change in income hasn’t kept pace with inflation .
There are other factors at play that could mean even more money in claimants’ refunds this year. One reason refunds in 2023 were lower than in previous years was because many pandemic-era tax credits had vanished. However, other credits and changes will be made this year, such as the new $7,500 EV tax credit for eligible EV owners. Likewise, politicians in the House of Representatives voted to extend the child tax credit once again. If it fully passes Congress, there’s a chance families will be able to collect extra money for each child as early as this tax season.
Other small improvements to the IRS’ filing process don’t necessarily mean a bigger refund, but they could help you save money. The agency has expanded eligibility for its IRS Free File program, allowing those making less than $79,000 the opportunity to file their taxes for free. Those who live in one of the 12 pilot states and earn less than $200,000 as a single-filer can also use the IRS’s new Direct File tool, as a free alternative to tax preparation software companies.
If you’ve already filed your taxes and are waiting to receive your refund, you can track it with the IRS’s enhanced Where’s My Refund? tool. The IRS has updated Where’s My Refund? with more detailed status messages, allowing you to get a better idea of how long it will take for your refund to reach you.
More from Money:
5 Best Tax Relief Companies of March 2024
When are taxes due in 2024? Here are the deadlines you need to know
How to get access to the IRS’s new free tax software