The IRS officially opened tax season more than a month ago—on January 29, 2024—and as the days have ticked by, the filing season has remained, like the weather, somewhat cool.
The most recent tax filing data still shows a dip in tax returns received compared to the prior year. The IRS received 44,584,000 tax returns as of February 23, 2024, a 3.0% decline from the previous year.
The IRS notes that the current tax season began about a week later than it did in 2023. The 2023 filing season began on January 23, 2023, which means the IRS had been receiving returns for 33 days by February 23, 2023. That compares to only 26 days for the 2024 filing season, which opened on January 29, 2024. The IRS continues to maintain that it’s “a strong start” with “all systems running well.”
It’s worth noting, however, that the due date is also earlier in 2024—April 15 in 2024 compared to April 18 in 2023. A more compressed season (78 days in 2024 as compared to 86 days in 2023) should mean that taxpayers would be motivated to file early, since there are far fewer days to procrastinate. That is clearly not the case in 2024.
I’ve suggested for weeks that many taxpayers are likely waiting to file until the Tax Relief for American Families and Workers Act becomes law. The legislation, which would, among other things, expand the child tax credit retroactively to the 2023 tax year, was announced in mid-January and passed the House at the end of the month. However, it has since been stalled in the Senate and no vote has been scheduled.
IRS Commissioner Danny Werner has encouraged taxpayers to file anyway, saying that the IRS will make any necessary changes. That proclamation doesn’t appear to have moved the needle much.
While the number of returns submitted wasn’t overwhelming, neither is the speed of processing. The data shows that the IRS has processed 44,073,000 individual income tax returns as of February 23, 2024, as compared to 45,722,0000 by February 24, 2023. That’s a decrease of just 3.6%.
Most—just under 56%—of e-filed returns were self-prepared. That number is dropping as the season progresses, which isn’t unusual. Professionally prepared returns—those accounted for 19,290,000 of e-filed returns received so far in 2024—tend to pick up as the season rolls on.
A significant majority of the returns received to date—a whopping 98%—were e-filed. That number is the same as last week and isn’t expected to drop. The IRS encourages taxpayers to file electronically, noting that taxpayers who e-file and use direct deposit typically see a refund within 21 days.
Web visits to IRS.gov were robust, increasing by 13.7% compared to last year. There have been 292,164,000 visits to the website as of February 16, 2024, compared to 256,924,000 visits as of February 23, 2023.
Taxpayers may be using the website more often to check the status of their tax refunds. The IRS has reminded taxpayers that Where’s My Refund? remains the best way to check the status of a refund. Notably, it provides taxpayers with three key pieces of information: receipt of your federal tax return, approval of your tax refund, and issuing date of your approved tax refund. Information for returns from tax years 2023, 2022 and 2021 is available.
Refund status information is typically available within 24 hours after the IRS receives your e-filed tax return for the current tax year, three to four days after receipt of your e-filed tax return for the tax years 2022 or 2021, or four weeks after mailing your paper return.
The IRS only updates the tool once a day, usually overnight.
Taxpayers who are checking their refund status are probably glad to see one number moving up this week: the average tax refund.
The number of refunds issued has remained relatively low. The IRS has issued 28,945,000 tax refunds so far in 2024 compared to 35,142,000 as of February 24, 2023, a decrease of 17.6%. That works out to $92.988 billion in total refunds, compared to $108.204 billion in 2023, a decrease of 14.1%.
The good news is, however, that the average tax refund continues to climb higher: $3,213 per taxpayer as of February 23, 2024, compared to $3,079 as of February 24, 2023, an increase of 4.3%.
I would expect to see those numbers increase within the next couple of weeks. The law requires the IRS to hold refunds tied to the Earned Income Tax Credit (EITC) and the ACTC until mid-February. The rule applies to the entire refund—even the portion not associated with the EITC and ACTC. That means if you qualify for the refundable credit, you’ll have to wait until the IRS can release it. The IRS has advised that EITC/ACTC filers should expect to see refunds by February 27, 2024, if they e-filed their returns and opted for direct deposit (and there were no issues with those returns). That should mean that refund numbers in the next reporting cycle will be higher.
Check back as the season progresses for updated numbers.
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