It's Tax Time - get your 2023 return filed and prepare to wait for a bit...

IRS Tax season is upon us. Although the filing season started a week later this year, nothing extraordinary appears to be present in the timing and amounts of refunds expected.

The IRS filing season started on January 29th this year - versus last year, when it started 7 days earlier (on January 23, 2023). The filing season begins on different days each year - as the IRS finalizes the programs for their computer systems and manages various legislative factors as well.

The first couple of weeks of reporting from the IRS showed some interesting (and likely, distorted) year over year averages for refunds paid by the IRS. On the report for the week ending February 2nd, 2024 the size of the average refund was about 29% smaller for 2024 vs 2023. For the week ending February 9, the size of the average refund was only about 13% smaller for 2024 vs 2023. Fewer days of activity for 2024 may account for much of this year over year difference.

IF a filer has claimed an Earned Income Tax Credit and/or Additional Child Tax credits, those credits cannot be paid out by the IRS until mid-February, by law. This statutory delay may cause the average refunds to appear to be smaller initially and trend higher during the tax season as they are actually paid out.

IRS spokesman Clay Sanford says that over the next week and months, he expects that these annual average refund amounts will tend to converge and the average refund will be around the same as it has been previous years. Sanford says the average refund doesn't vary much year to year - and he expects it will be around $1,900 this year.

He went on to say that about 80% of returns are e-filed with the IRS and that most of those have direct deposit used to receive refund payments. For those filers who are expecting to receive a refund and that e-file and use direct deposit, they should expect it to take about 3 weeks to receive their refund after filing their return. Paper filers that want a check might expect to wait between 4 and 6 weeks to receive their refunds.

www.irs.gov