The total amount of money flowing into American wallets from federal tax refunds is down sharply in 2023, according to the latest figures from the IRS.
So far in 2023, federal tax refunds amount to about $255 billion, an 8.7% decrease from the $279 billion refunded at the same point last year.
The size of the average refund also is shrinking. It stands at $2,777, down 8% from the average refund of $3,019 at this point in 2022.
In truth, none of this should be a surprise. The IRS itself warned earlier in the year that refunds likely would be smaller this tax season.
Many of the factors shrinking refunds are related to the nation’s emergence from the COVID-19 pandemic, as we explained in our story “5 Reasons Your Tax Refund Might Be Smaller This Year.”
About 91.8 million refunds have been processed so far in 2023, a slight decrease from the 92.5 million refunds processed a year ago, according to the IRS.
For its latest update, the agency compared data from two points in time — April 29, 2022, and April 28 of this year — and found that the number of refunds is down 0.8% year over year.
Regardless of the size of your tax refund, there is a lot you can do to use the money to improve your life. For tips, on what you should and should not do with your refund, check out: