More from Smart Tax Planning: Last year, the average refund for the 2023 filing season was $3,167, as of Dec. 29, according to the IRS. A lot of people who typically file early — such as earned income tax recipients and child tax credit recipients — still haven't filed, Steber said.
The average tax refund last filing season
According to filing season statistics reported by the IRS, the average tax refund in the 2023 tax season—for tax year 2022—was $2,753. The average direct deposit tax refund was slightly higher than the overall average, at $2,827.
The average individual income tax refund was $2,903 for the 2022 tax-filing year, an 11% decrease from taxes filed in 2021 when the average refund was $3,263, according to the IRS.
The IRS anticipates most taxpayers will receive their refund within 21 days of when they file electronically, if they choose direct deposit and there are no issues with their tax return. Taxpayers should check Where's My Refund?
For 2023, taxpayers may be eligible for a credit of up to $2,000 — and $1,600 of that may be refundable. Legislation in the works would increase the refundable portion of the credit to $1,800.
Here's an example of how the proposal would work: a mother with two children who earns $15,000 would receive a $3,600 Child Tax Credit in 2023, up from $1,875 under current law. While not the full $2,000 per-child credit, an increase of $1,725 could help put food on the table or pay for school clothes or diapers.
Specifying more income on your W-4 will mean smaller paychecks, since more tax will be withheld. This increases your chances of over-withholding, which can lead to a bigger tax refund. That's why it's called a “refund:” you are just getting money back that you overpaid to the IRS during the year.
But refunds are expected to be noticeably bigger in 2024, with some people receiving up to 10% more than they did last year, according to Mark Steber, chief tax information officer at Jackson Hewitt. That would amount to a roughly $300 to $400 increase.
The IRS Started Accepting Returns January 29, 2024
In most cases, early tax filers who are a due a refund can often see the refund as early as mid- or late February if they have it direct deposited. That's without an expensive “tax refund loan” or other similar product.
What is the average tax return for a single person making $40,000? If you are a single person making $40,000 annually, you could expect a tax return of around $1,761 on average.
If you make $60,000 a year living in the region of California, USA, you will be taxed $13,653. That means that your net pay will be $46,347 per year, or $3,862 per month.
There's pending tax legislation in Congress that could provide a retroactive boost for the child tax credit for 2023, which could increase refunds for certain eligible filers. But if taxpayers are prepared to file, they shouldn't wait, according to the IRS.
According to early IRS data, the average tax refund will be about 11% smaller in 2023 versus 2022, largely due to the end of pandemic-related tax credits and deductions.
If you make $70,000 a year living in the region of California, USA, you will be taxed $17,665. That means that your net pay will be $52,335 per year, or $4,361 per month. Your average tax rate is 25.2% and your marginal tax rate is 41.0%.
You must claim the credit on the 2023 FTB 3514 form, California Earned Income Tax Credit, or if you e-file follow your software's instructions. Generally, you may claim CalEITC to receive a refund for up to four prior years prior by filing or amending your state income tax return.
The child tax credit is a tax break families can receive if they have qualifying children. The amount a family can receive is up to $2,000 per child, but it's only partially refundable. That means if not all is applied to any taxes you owe to lower your tax bill, you may not receive the additional money left over.
The changes under negotiation in Congress right now contain several advantages for low- earning parents: For one, the refundable portion of the credit would increase incrementally over the 2023, 2024 and 2025 tax years — from $1,800 to $1,900 to $2,000.
There are lots of reasons why this might happen. In most cases, the IRS takes part of your refund to pay for outstanding government debts you might owe. These include: Overdue federal tax debts.
By placing a “0” on line 5, you are indicating that you want the most amount of tax taken out of your pay each pay period. If you wish to claim 1 for yourself instead, then less tax is taken out of your pay each pay period. 2.
If you didn't account for each job across your W-4s, you may not have withheld enough, so your tax refund could be less than expected in 2022. Not factoring eligibility changes for tax credits and deductions: There may be other impacts on your refund due to the credits you can take.
The Earned Income Credit (EIC) increases with the first three children you claim. The maximum number of dependents you can claim for earned income credit purposes is three. You must also meet other requirements related to your adjusted gross income (AGI) to qualify for the EIC.
It's up to you and your spouse. You might decide that the parent who gets the biggest tax benefit should claim the child. If you can't agree, however, the dependency claim goes to your spouse because your son lived with her for more of the year than he lived with you.