Decrease in IRS Tax Refunds Reported in 2024
The IRS has reported a decrease in the number of tax refunds doled out in 2024, with around 6 million less compared to the same period last year. This trend could signal changes in taxation policy or economy, warranting further analysis to comprehend its causes.
By the start of March, the IRS handed out roughly 36,288,000 refunds, a significant 14% less than the 42,040,000 of the previous year. This sharp decrease could be a result of recent changes in the tax code. Nevertheless, the IRS continues to process returns swiftly, assuring the public that there is still a substantial amount of refunds in the pipeline.
Notwithstanding a delay in the tax season, the total number of tax returns received and processed dropped only slightly from 2023, by 2%. A silver lining has been an increase in the average refund amount which grew by 1.5% compared to the previous year. Experts attribute this stability to taxpayers’ increasing comfort with online filing options, a trend expected to persist in future tax seasons.
Recipients of refunds in 2024 observed a small upward shift in the average refund amount, almost 5% higher than the previous year. In spite of a minor increase, many taxpayers expected a larger bump in refunds due to recent tax reforms. Experts remind taxpayers to keep an eye on changing tax policies and adjust their withholdings accordingly to optimize their annual refund.
Mark Steber of Jackson Hewitt pointed out that individuals eligible for common tax credits had yet to submit their returns. As per IRS rules, those aiming to claim these credits were unlikely to see their refunds before February 27, 2024. He cited the complex claiming procedures and the impact of the COVID-19 pandemic as cornfactors. Steber advised taxpayers to submit their returns promptly, balancing speed with thoroughness to avoid errors that could delay refunds.
By March 2024, the IRS accepted slightly over 54 million tax returns and processed 53.2 million. Although fewer returns were handled in 2024, the IRS maintained a high processing rate close to 98.5%, showing their dedication towards efficient taxpayer service. However, it is crucial for individuals to ensure their returns are correctly filled out and submitted early for smooth processing.
