Tax Refunds Decline in 2024: IRS Issues 93.9 Million, Average Amount Up to $3,050
2024 Tax Refund Trends: Fewer Americans Receive IRS Refunds, Average Payment Increases
In a shift from previous years fewer Americans are receiving tax refunds from the federal government marking a notable trend for 2024, according to the published article of moneywise. According to mid-May figures from the Internal Revenue Service (IRS), the number of tax refunds issued this year totaled 93.9 million down 1% from the same period in 2023 when 94.8 million refunds were distributed. This decline follows a broader trend with refunds decreasing by 4.4% from 2022 to 2023. Despite the drop in volume the average refund amount saw a positive uptick rising by 4.8% to $3,050 compared to $2,910 in 2023.
The reasons behind this decline in tax refunds are multifaceted and not entirely clear. One potential factor highlighted by experts is the increasing number of taxpayers earning income outside the traditional payroll system such as gig economy workers, independent contractors and individuals involved in platforms like Airbnb. These earners often fail to make quarterly estimated tax payments leading to penalties that diminish their potential refunds. Additionally, changes in the withholding system implemented during the Trump administration aimed to reduce refunds and may have contributed to the current landscape.
IRS Reports Drop in Tax Refunds for 2024: Average Refund Rises to $3,050 Despite Decrease
Furthermore, the IRS’s handling of tax payments and refunds has come under scrutiny with concerns raised about the complexity and opacity of the process. The agency’s shift in approach has coincided with a rise in taxpayers owing money at tax time rather than receiving refunds. This shift underscores the evolving challenges facing taxpayers and the IRS alike in navigating the tax landscape particularly in an era marked by economic volatility and changing employment patterns.