Well, it seems Uncle Sam isn’t feeling too generous this year. The IRS has given us some rather disappointing news about our tax refunds. It turns out they’re going to be smaller this year compared to last. Now isn’t that just a kick in the pants?
As of last month, the average refund is a measly $1,395, down a whopping 29% from last year’s average of $1,963. What gives? Well, the IRS is quick to note that these early figures may change as more returns are processed. But let’s be honest, who’s holding their breath for that?
This decrease is based on 2.6 million refunds totaling $3.65 billion. And to add insult to injury, refunds for those with earned income or child tax credits are delayed until mid-February. I mean, come on! As if we didn’t have enough to worry about with ongoing inflation affecting our cost of living, now we have to contend with smaller tax refunds?
Last year, three-quarters of us filers got a refund, averaging $3,176. This year? We’re not so lucky. But hey, there might be a silver lining. Some experts are predicting that this year’s refunds might increase by up to 10%, thanks to inflation adjustments.
Mark Steber of Jackson Hewitt says, “For anybody whose income did not outpace inflation, they should do better.” Well Mark, here’s hoping you’re right. Because right now, things are looking pretty grim.
Inflation has led to larger standard deductions and tax bracket adjustments. For 2023, tax brackets increased by 7.1%, which is more than what most of us saw in our paychecks. So, while the bigwigs in Washington are playing around with our money, we’re left picking up the pieces.
And what’s the IRS’s advice? File early. Eric Bronnenkant of Betterment advises filing early to use your refund sooner, as the IRS doesn’t pay interest on refunds. Gee, thanks for the tip, Eric.
So there you have it folks. Looks like we’re in for a tough tax season. But hey, at least we can take solace in the fact that our hard-earned money is going to good use, right? Like funding endless government programs and paying for the bloated bureaucracy. Sure makes all those late nights and overtime feel worth it, doesn’t it?
And remember, the IRS aims to issue refunds within 21 days for those filing electronically and choosing direct deposit. Just don’t hold your breath. After all, we wouldn’t want you to turn blue waiting for Uncle Sam to give you back your own money.
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