The average tax refund in 2024 is higher than last year: Will you get a bigger refund?

With tax season in full swing in the United States, many are anxiously awaiting to see if their refunds will be larger than last year’s and, if so, by how much.

However, with no substantive changes to the tax code made over the last year, refund size at the federal level is unlikely to change dramatically. Refunds distributed by the Internal Revenue Service (IRS) will be smaller than those issued during the pandemic when additional tax credits and benefits were enhanced to boost the income of households, particularly those who had lost their jobs or had children. Nevertheless, some states have approved new credits for families with children that could help boost one’s state refund, even if their federal payment remains comparable to that received in 2023.

Adjustments made to federal tax brackets and the standard deduction

At this time last year, the average refund being distributed was $2,414. This year, that figure has fallen by 9.21 percent to $2,191. However, in the most recent weekly filing statistics data published by the IRS, the average direct deposit and traditional paper refund amounts were higher than those received around the same time in 2023.

What might be driving the slight increase?

One answer might be the adjustments made by the IRS to tax brackets that were altered slightly to reduce the impact of inflation and its effect on purchasing power would have come tax time. Refunds could rise slightly this year due to increases in the standard deduction and adjustments to the federal tax brackets to account for the disposable income-destroying effects of inflation.

Additionally, adjustments to these brackets could keep some workers in a lower tax bracket, meaning that while their refund might not be more significant, their overall tax bill is likely lower than it would have been without the changes.

Additionally, the standard deduction was adjusted up $1,500 to $29,200 for married couples filing jointly. For those who file as single or married but separate, it increased from $750 from last year to $14,600. Heads of household also saw a sizeable bump of $1,100 to $21,900. Like with the modifications made to the tax brackets, these larger deductions could lower one’s tax bill and thus keep more money in their pocket. While not a direct result of refund size, taxpayers who find themselves in this situation are not likely to complain.

How long will it take to receive a refund?

The Internal Revenue Service (IRS) estimates that taxpayers who submit their tax returns electronically and provide direct deposit information can expect to receive their refund within twenty-one days. However, taxpayers who file their tax returns on paper can expect longer processing times, resulting in delays in receiving their refund.

Moreover, the IRS offers free filing options for taxpayers with an annual gross income of $79,000 or less. Additionally, taxpayers can use a survey developed by the IRS to identify the best IRS partner software that meets their filing needs.