We’re in tax season and, let’s be honest, we hate it. It’s the time of year when the most paperwork moves around and when Americans try to lay out how much money we have left in our wallets and how much inflation, though moderate, is still present, will affect us. That’s why the Internal Revenue Service (IRS) has released some good news among all the doubts we have: this year’s refunds are going to be higher than last year’s. Now you’ll probably face this season a little differently!
What are the IRS figures we’re talking about?
On March 14, 2025, the IRS shared its latest data, and the results were clear: refunds have increased by 5.2 percent, a fairly large rise considering the 2024 Consumer Price Index (CPI), which was 2.4 percent, so we’re talking about an approximate increase of 4.8 percent.
Have they already processed the applications?
Yes, they’ve already processed over 69 million returns and issued more than 49 million refunds (we’re talking about a lot of zeros), and the general average of refunds has been $3,271, but those who chose direct deposit received even more. These lucky ones got up to $3,300. It may seem like a small difference, but what would you do with that extra $30? Now you know for next time that choosing digital methods also has its own advantages!
Why has the refund increased?
Several factors explain this, but one of the most relevant is that the IRS refund is calculated based on excess withheld taxes, so as the average salary has increased and adjustments have been made, many people had more taxes withheld than necessary, so now they’ll see much larger refunds (proving that we should always look on the bright side!)
Were there fewer returns in 2024?
No, but at this time last year, the IRS had received and processed 1.2 million returns, but the percentage of people receiving refunds this year has increased, from 68.8 percent to 70.8 percent this year.
I haven’t received the refund I expected…
Keep in mind that although there is an overall increase, not all taxpayers are receiving the amount of money they were expecting. The IRS has published some reasons why a refund might be smaller, one of the main ones being unpaid debts, like child support. Yes, in these cases, and if there hasn’t been a child support payment, the federal government can withhold part of the refund and allocate it to fulfilling these obligations, since children’s well-being is a priority.
How do I make sure I receive the maximum possible?
Well, if you haven’t filed your return yet, check your deductions and tax credits as soon as possible, it’s key to getting your full refund. You can also take advantage of online software because, as we said at the beginning of this article, you can optimize the process this way. And of course, if you have doubts, don’t wait to ask a tax advisor who can help you improve your numbers.
Also, whenever you can, choose direct deposit. It’s faster, safer, more reliable, and could give you a slightly higher amount.
Check the IRS calendar
You already know that tax season has started and that it will end on April 15, 2025, but don’t wait until the last minute and file your return as soon as possible (the sooner you send the documentation, the sooner you’ll get your money).
Every dollar counts, and taxes are necessary for everyone, so even if we don’t like paying them, sometimes they do have a positive side, like this time!