Posted on 04/24/2023 7:22:49 AM PDT by Twotone
The Internal Revenue Service (IRS) is paying $23 billion less in tax refunds for the 2023 filing season—with the average refund amount found to be lower by nearly $300.
The IRS has issued over 69 million refunds collectively worth $198.868 billion for the week ending April 7, 2023, according to the agency’s filing statistics. Compared to the $222.344 billion in refunds handed out in the 2022 season, the 2023 filing season’s refund is $23.476 billion smaller or about 10.6 percent lower.
The average refund amount between the filing seasons has dropped from $3,175 to $2,878, a decline of 9.3 percent or $297. In fiscal 2022, the IRS collected $2.9 trillion in individual income taxes.
Back in January, the IRS had suggested that refund amounts could be smaller this time around. “Due to tax law changes such as the elimination of the Advance Child Tax Credit and no Recovery Rebate Credit this year to claim pandemic-related stimulus payments, many taxpayers may find their refunds somewhat lower this year,” the IRS had said in a Jan. 23 news release.
The U.S. government handed out three rounds of stimulus checks to Americans during the pandemic period. People could claim the missed first and second rounds of stimulus checks on the 2020 tax return. Any missed third-round stimulus checks were claimed in the 2021 return which was filed in the 2022 season.
The federal government had also expanded the Child Tax Credit (CTC) program during the pandemic, boosting benefits per child from $2,000 to $3,600 for children under the age of 6, and to $3,000 for children between the ages of 6 and 17.
The benefits of stimulus payments and CTC have now ended, thereby contributing to a lower refund amount during the 2023 filing season. Americans Concerned Over Smaller Tax Refunds
Smaller tax refunds pose a major issue for Americans, according to the results of a Bankrate survey published last month. When asked how important the tax refund is to their overall financial situation, 43 percent said that the refunds are “very important” while 32 percent said it was “somewhat important.”
While 79 percent of women said the tax refund was crucial to their financial health, 71 percent of men also held the same view.
Among low-income households whose annual earning is below $50,000, 82 percent see the tax refund as important. This fell to 75 percent among households making between $50,000 and $79,999, and then to 69 percent among those making $80,000 to $99,999.
Thirty-four percent of respondents worry that the tax refund this year “won’t make as big of an impact due to inflation/rising costs.” While 33 percent are concerned the refund will be smaller than usual, 19 percent are worried the refund will be delayed.
As to how they plan on using the tax refund, 28 percent said the funds would be used to pay back debt, 26 percent plan to put the money into savings, and 13 percent expect to use it for day-to-day expenses. Tax Return Filing Deadlines and Penalties
The deadline for filing 2022 tax returns was April 18. Individuals who have failed to file the returns on time can request a six-month extension. This will give them time till Oct. 16 to file taxes.
“By filing either a return on time or requesting an extension by the April 18 filing deadline, they’ll avoid the late-filing penalty, which can be 10 times as costly as the penalty for not paying,” the IRS said in a statement.
For amounts unpaid beyond the April 18 deadline, the IRS will charge a penalty of 0.5 percent of the tax owed per month, which is capped at 25 percent. The penalty for not filing tax returns on time is 5 percent per month, which is also capped at 25 percent.
Those who have failed to pay on time can apply for a payment plan that will allow them to pay off the tax due in installments.
I don’t want a refund from the Massah. That means they got an interest-free loan all year.
An IRS refund is the stuff of dreams.
Well, we weren’t getting much back and when it did show up, the IRS decided the VA needed it more than I did for medical bills I was paying on. 96% went to them. And, yes it is legal for them to do that. Guess no eggs this week. 😁🤔👍
Either people who make money made a lot more money than they thought or tax credits are far fewer and people are feeling the real tax burden of the USA.
Which is more correct.
Refund?
What the heck is a ‘refund’?
Last time I hear from the IRS they wanted more money.
With interest!..................
Last two years they’ve sent me $1. Souvenirs.
We need a Constitutional amendment setting election day as the first Tuesday following tax filing day.
Refund? Try paying quarterly tax “estimates” before you’ve even earned the money.
Anyone that plans for a refund from the IRS is a financial mental midget. It makes zero cents (sic) to give the government an interest free loan.
There are people who will adjust their W-4 to have as much as possible withheld so that they can maximize their refund.
the IRS will charge a penalty of 0.5 percent of the tax owed per month, which is capped at 25 percent.
Over 80 million a-holes got exactly what they voted for.
I can’t remember the last time that we got a “refund”.
Duh, that’s simple.
The child tax credit decreased from $3,600 or $3,000 to $2,000.
At the same time, the IRS Changed the withholding tables to make people were mak8ng more money.
The new w-4 forms suck. This is where you tell your employer what to withhold.
I haven’t gotten a refund in many years. They’ll get the money when I’m legally required to pay it, and not a moment before.
The function of the IRS is to tax and take as much from Americans as possible.
Now, with a democrat president and a complicit congress, the IRS is doubling down on taking and keeping Americans’ money.
What the heck do people expect when democrats want 87,000 more IRS agents? Hmmm.. take your pick: for giving money back to Americans, or for taking more from Americans?
The idea is to tax higher, and to tax everyone in sight and everything in sight.
To get their dream target of 90% taxation minimum, it means taking just about everything that Americans own.
Look for the IRS to be looking into all bank accounts and all investments and then, appropriating at least half of what Americans worked so hard for. It’s already started, with taxing of estimated stock earnings, which may or may not be realized,and which in reality, don’t even exist.
Democrats aren’t done yer, and their magic number of 90% taxation, will be achieved if Americans allow them to keep control.. Let’s face it, democrats have not been the democratic party of old, and they’ve become full-blown socialists, on the verge of going full communist.
I would keep my whole check for 9 months and have taxes taken out the last 3 months.
“Refunds” are less because the government lowered tax rates for the “working poor”, and the related amounts for tax withholding at the lower end of the income scale. Low wage, part time employees often end up with zero withholding liability. No pay, no “refund”.
That's half of it.
The other half is to get rid of with holding and everybody pay with a check, money order or cash just before they vote.
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