Average refunds are less than last year
The IRS reported on February 20 that it has issued over $9 billion in tax refunds since the 2022 tax season began on January 24. The average refund paid out is around $2200 per person and around 4.3 million Americans have received a refund so far.
Smaller refunds on average this tax year
It may seem an exciting prospect to get a refund from the IRS, but it's interesting to note that the average size of refund received in 2021 was significantly higher - an average of $2775 was paid out against 2020 tax returns according to the IRS.
Financial analyst firm Barron's reports that refunds may be smaller this year than in previous years, as a direct result of federal government stimulus payments that were deposited direct to recipients' bank accounts. If these aren't reported appropriately it could be that the appropriate adjustments aren't reflected in tax returns, leading to smaller than expected refunds.
What to do with your refund?
If you're fortunate enough to get a refund, what should you do with it? It would be tempting to use the money to pay for a vacation or to treat yourself of your family. But it may just be the case that many Floridians actually need the extra money to help them meet the rising costs of living, caused by record inflation being felt across the United States.
Indeed, a recent study suggests that while inflation is at the highest level seen in decades, this is being felt most severely in Florida - specifically in Tampa:
For this reason, it seems likely then that many of those receiving tax refunds from the IRS will actually need the money just to make ends meet.
The deadline for most tax payers to file their taxes is April 18. The IRS suggests that tax payers should file their taxes as early as possible, and preferably using the online service.
Have you filed your taxes yet? What would you do if you received a refund from the IRS? Let me know in the comments section below.