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.
Nothing symbolizes the slave/master mentality that too many Americans have toward government than this reliance on this "refund". Dummies, that's your money your government overlords are giving back to you at no interest to them. If you learn to manage your finances better throughout the year, you don't need to rely on this refund like every year like a baby bird with its maw agape waiting impatiently for the next worm.
We need to abolish the federal income tax.
USA got along just fine for two hundred years without it.
“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.”
____________________________________________
100% spot on!
Something is building towards a no good end in our economy. Locally, our small town just had a local clean-up trash day at a local town park and vicinity. They hired an empty dumpster for it and had it delivered to the park the day before the volunteer clean up and by the next morning it was packed FULL of broken furniture, appliances, old tire, rusty metal and general garbage by unknown ?locals. No surveillance cameras near I think they said. Unhappiness all around besides those who got rid of their junk. Some commented that this was slightly better than whoever dumping it all on the side of a road or in woods somewhere.
I concur! That would move Inauguration Day to Independence Day - big national party!
Those people are undisciplined.
“Try paying quarterly tax”
I have often thought that for one year, all withholding should be suspended, and the workers should just submit quarterlies. Democrats tell us that the workers are far more virtuous than the bosses, so there should be no problem, right?
It’s not always “your” money being given back. Many times it’s “my” money too.
The Earned Income Tax Credit (EITC) is an income redistribution scheme.
-Nationwide during 2022, 31 million eligible workers and families received about $64 billion in EITC
-The average amount of EITC received nationwide was about $2,0431
While a compassionate thought, the EITC just creates a new bunch of gimmedats.
EC
I had to write the big check this year, again. Normally having the extra money during the year to invest is helpful. Under the Biden regime, that wasn't necessarily a good thing, sadly.
I had to write a big one, as well. Most of my income was dividends and interest so no withholding.
Refunds were down after the Trump tax cut, due to more accurate withholding. Almost everyone’s taxes were lower, but IIRC the legacy media spun it as Trump taking money from poor people.
TOTALLY agree with that!
What we need is elimination of the Taxes.
Since that horse left the barn the c automatic tax withholding should be elinated.
All real taxpayers would suddenly upstand what government theft really looks like.
THEN have the taxes due the day before the Constitutionally valid election.
The IRS doesn't control the refund nearly as much as the individual taxpayer does. There are multiple factors that are in play:
Gibmedats are getting less in freebies
Incomes could be down
Taxpayers could have adjusted their withholdings
Tax cheats could be a little more scared
Tax laws have changed
The scariest part is that people who get large refunds, after filing, have over withheld estimated taxes. It always has been their money, they just made it unavailable to themselves and made a free loan to the government for the tax year.
After screwing up on processing tax returns and blaming it on COVID, maybe people are adjusting their withholdings, so the IRS doesn’t have same chance to irresponsibly hold onto money?
Did a preliminary tax calculation using ***** software on January 2 and made an extra quarterly estimated tax payment on January 10 to cover the expected tax due amount.
Nailed the final tax due amount on April 15 to within $150. No penalty and no interest.
There is no reason or need to overpay taxes.
Good point. All part-and-parcel of this country now having more moochers than producers. A producer’s strike and a trip to Galt’s Gulch never sounded better.
Gave them 54 dollars this year which made me happy to just about break even. My guess is the ref were down because some “benefit” was reduced. I am still beyond outraged that some refunds exceed what if anything was paid in. Those should be called federal welfare or grants, not refunds.
A friend in another location reports they had a free dump your krap event and 950 cars queued up to unload garbage
An hour and a half wait.
And yes, it’s a great deal better they all did that. Instead of just tossing thrur trash out on the streets like many people normally do
These are the same people who get all giddy about voting for some politician because they promise to give them something “for free.” Just once I want to see those clueless leeches forced to knock on their neighbor’s door and tell them why they’re obligated to give them some of their money. Remove the government smoke and mirrors and the average moron would be shocked at what is really happening in that “free stuff” transaction.
Of course, the urban-dwelling “gibmedats” wouldn’t care anyway; they’d just consider it “reparations.”
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