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 $183 billion, a 10.4% decrease from the $204 billion refunded at the same point last year.
The size of the promedio refund also is shrinking. It stands at $2,910, down 9.8% from the promedio refund of $3,226 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.”
Nearly 63 million Americans have gotten refunds so far in 2023, a slight decrease from the same time period a year ago, according to the IRS.
For its latest update, the agency compared data from two points in time — April 1, 2022, and March 31 of this year — and found that the number of refunds is down 0.7% year over year, from about 63.4 million at this point in 2022 to 62.9 million this 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: