The IRS has so far issued 43 million tax refunds, worth $135 billion

Wealth

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The tax deadline is approaching and the IRS has already issued more than 43 million refunds worth nearly $135.3 billion.

As of March 8, the average refund was $3,145, up from $2,972 the same week in 2023, the agency reported last week.

However, the average refund could change as the IRS receives tens of millions more returns.

The latest filing statistics show the IRS had only received less than half of the more than 146 million individual returns expected for the 2023 filing season.

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You can check your refund status with the “Where’s My Refund?” online tool. The status will appear 24 hours after e-filing current-year returns or four weeks for paper-filed returns.

Why many taxpayers wait to file

Typically, taxpayers file sooner when they’re expecting a refund, said Mark Baran, managing director at financial firm CBIZ Marks Paneth.

Indeed, knowing “they won’t get a refund” is one of the top five reasons why Americans procrastinate on taxes, according to a January survey from IPX1031, an investment property exchange service.

Plus, many taxpayers file for an extension, which bumps the federal filing deadline by six months, to Oct. 15 this year. This provides more time to file, but federal taxes owed are typically still due on April 15. Some taxpayers have an automatic federal extension due to natural disasters.

“A lot of high-net-worth clients will file extensions” because they’re still waiting for tax forms like Schedule K-1 for so-called pass-through business income, Baran said.

“The [latest IRS] data doesn’t reflect the returns that are ultimately filed by October,” he added.

As of Dec. 23, the average refund for last season was $3,167, which was slightly lower than $3,252 in 2022, the IRS reported.

Why more taxpayers are relying on a refund

Some 40% of taxpayers are relying on a refund this season, up from 36% last year, according to a LendingTree survey published in March.

“The most simple explanation is inflation,” said Jacob Channel, LendingTree’s senior economist.

While inflation is down significantly from its 9.1% peak in 2022, it remains above the Federal Reserve’s 2% target, he said.

The consumer price index, which tracks the cost of consumer goods and services over time, rose 3.2% in February compared to one year ago, the Bureau of Labor Statistics reported in March.

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