With tax season in full swing, the IRS is offering a peek at early tax filings, and the number so far may bode ill for Americans hoping for a juicier refund.
The agency, which started accepting tax returns for the 2022 tax year on January 23, said it has received almost 19 million filings through February 3.
In that time, the IRS has issued about 8 million refunds, according to the most recent data.
The average refund check so far this year: $1,963, or almost 11% lower than compared with the same time a year earlier when refunds were averaging about $2,200 per filer.
That jibes with warnings from tax pros and even the IRS itself that tax refunds this year would likely be smaller than in 2022, leading to what some experts are calling a "tax refund shock." The reason for the lower refunds stems from the expiration of pandemic tax credits and other benefits, ranging from the expanded Child Tax Credit to three rounds of federal stimulus checks.
More taxpayers are filing their returns earlier this year, according to IRS and U.S. Treasury Department data. Through February 3, the IRS had received 19 million filings, about 2.3 million more than the same period a year ago.
One possible reason, Bank of America analysts said in a report. "We... believe individuals are filing their returns sooner this year to get refunds faster given the tougher economic environment," they noted.
The highest inflation in 40 years has walloped many Americans, with a recent Primerica study finding that three-quarters of families are cutting back on non-essential purchases to offset higher prices, while half are tapping into their emergency savings to keep afloat.
To be sure, it's still early in the tax filing season, with the IRS typically receiving more than 160 million tax returns annually. That means the vast majority of Americans have yet to file their taxes; the average refund is likely to change as the April 18 tax filing deadline draws near.
The average tax refund typically grows larger over the course of the tax filing season, likely as higher earners and people with more complicated taxes file later than those with simpler returns. The average tax refund in 2022 was almost $3,300, or 16% higher than in 2021.
