Early tax filers are seeing smaller tax refunds this year. The average refund for the first few weeks of the tax filing season is $1,395, IRS data showed.
Last year, the average refund was $1,963 within the first few weeks of filing opening. Refunds have declined by 28.9%, but the tax season is just getting started. This lower refund average is likely due to fewer people filing. By February 2023, nearly 19 million taxpayers had filed, while only about 15 million have filed so far this year.
The fact that filing opened later this year is also likely contributing to lower refund amounts. Filing opened on January 23rd last year and January 29th this year. In general, refunds are likely to even out as the tax season continues.
“I would expect things to be very much equal, barring any changes from Congress. If anything, changes to the child tax credit would increase refunds on average,” explained Tom O’Saben, director of tax content and government relations with the National Association of Tax Professionals.
To make sure you’re getting the best rate and lender for your needs, use Credible, an online marketplace that can show you multiple lenders all in one place.
IRS WAIVING $1 BILLION IN PENALTY TAXES, WILL KICK OFF 2024 TAX SEASON ON JAN. 29
This year, 12 states qualify for the IRS’s Direct File program. To make filing simpler, and to eliminate middlemen like TurboTax and other filing software, the IRS is creating their own filing system.
The program is being introduced in stages so the IRS can work out any bugs in the system before rolling it out to the entire country. The states that currently qualify for the direct file program include: Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.
The program is aimed at low-income filers who can’t afford other costly tax preparation options.
“I really hate to see lower-income people giving money to paid preparers. I get angry about it,” Robert Nassau, director of the Low Income Taxpayer Clinic at Syracuse University College of Law said. “[The program is] one more option for free tax preparation, and hopefully people will take advantage of it.”
Credible can help you find reputable personal loan lenders that provide timely funding. Visit Credible today to explore rates and loan terms and find lenders that advertise fast access to borrowed cash.
12 STATES QUALIFY FOR THE IRS DIRECT FILE PILOT PROGRAM: IS YOURS ONE OF THEM?
States affected by natural disasters qualify for a tax filing extension. While most taxpayers must pay their taxes by April 15th, some states have until June to file.
Connecticut faced major flooding in January that left thousands of residents without power for weeks. Businesses and residents affected by this flooding have until June 17th to file their taxes.
Mainers in certain counties also have until June 17th to file, due to severe flooding at the end of last year. Residents of Androscoggin, Franklin, Hancock, Kennebec, Oxford Penobscot, Piscataquis, Somerset, Waldo and Washington counties all have an extended filing deadline.
Another Northeastern state, Rhode Island, has been granted tax relief. Only Providence County, which was affected by severe storms last year, qualifies for a tax filing extension. Residents in this county also have until June 17th to file.
Frequent tornadoes that caused major destruction in Tennessee in December qualify residents of four counties for a filing extension. Davidson, Dickson, Montgomery and Sumner counties were hit the hardest by these storms. Residents have until June 17th to file federal income tax returns.
The last state to qualify for an extension is West Virginia. Last summer, West Virginia faced flooding, landslides and mudslides, causing damage to many homes. Taxpayers in Boone, Calhoun, Clay, Harrison and Kanawha counties have an extended return date of June 17th.
When it comes to personal loan shopping, Credible can do the heavy lifting for you. You can view multiple lenders, rates, and terms in one spot.
SOCIAL SECURITY IS COMING FOR A BIGGER CHUNK OF YOUR PAYCHECK
Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.
