We Looked At The 13+ Million Tax Refunds Already Issued - Here's The Average Payout For 2023
Americans are slowly getting their refunds and the big question is "What gives?". From the 13 Million refunds issued, here's the average.
As of February 10th, the IRS has already managed to process a whopping 26.6 million returns. Totaling over $26.648 Billion. (That's a lot of cheddar). But with inflation, and recession on the horizon that sum doesn’t go as far as you might think.
Comparing this season to last let’s look at the big changes and the core average that Americans are seeing and why.
What is the Average Tax Refund for 2023 (thus far)?
As of February 10th, the average refund is $ 2,084 if you filed and opted for a direct deposit but $ 1,997 if you’re waiting for that paper check via snail mail (wait people still do that?). Only about a $100 difference but still both options are seeing lower returns than they did a year ago.
2022 vs 2023 Refund Comparison
Wondering how the numbers stack up year over year. Well to make a long story short, 2022 saw major differences in refunds as did 2020 and 2021. But this isn’t just because the dollar bill isn’t buying as much as it once was a few years ago. Here’s the comparison:
Key Points:
- There’s a higher total refund amount, however, if you’ll notice there’s also a 48.4% higher amount of total returns as well. So it stands to reason, more people filing = more money being dispersed.
- Refunds are much smaller. Americans are seeing smaller checks this year than last. (We’ll discuss that in a moment.)
- The average refund dropped about the same. For both the total refund average and the direct deposit average, we see about a 13 - 14% decrease from last year.
Salt & Pepper
What Gives? Why are The Tax Refunds So Small?
The government giveth and they taketh away. Due to the pandemic, and inflation, the government decided to throw us a bone and offer higher tax credits and deductions to pad our refunds and knock some money off our tax bill. However that all come to a stop recently.
The American Rescue Plan of 2021 may have given some families a much-needed boost with an enhanced child tax credit and child and dependent care tax credit, worth up to $3,600 per child and $4,000 per dependent, respectively (nice!). But guess what? Those tax breaks have reverted to their previous levels (boo!). That means that for 2022, the child tax credit has dropped back down to a maximum of $2,000 per child, and the child and dependent care tax credit has fallen back to $1,050 per dependent.
Key Takeaways from Salt & Pepper
Now is not the time to go crazy with your refund check. Instead, use any money you can to get caught up and get ahead. Here are three places to put your refund if you’re getting one.
- Pay off high-interest debt: Credit cards, loans, etc. If you have high-interest debt, the biggest bonus you can give yourself is to get out from under it.
- Get caught up: Are you in bad standing with any of your lenders or creditors? Now’s the time to get back into their good graces.
- Pad your Emergency Fund: Expect the unexpected by having that rainy day fund nested away for those unplanned uh-ohs.
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