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Taxes

Here is the average tax refund so far this year — and some advice on what to do with yours

The average refund amount in 2023 is trending lower than this time last year.

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Ivan-balvan | iStock | Getty Images

The page has turned on another tax filing season and here's the data on what refunds looked like this year.

As of Apr. 21, the IRS reported the average refund amount (aka money taxpayers overpaid the government) in 2023 as $2,753. This is almost a 9% drop from what the average refund amount was last year, which clocked in at $3,012.

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The IRS warned back in November 2022 that "refunds may be smaller in 2023" for various reasons, including the lack of economic impact payments last year and the greater difficulty around deducting charitable contributions.

The tax filing deadline fell on Apr. 18, but if you got an extension on filing your returns, when the time comes do so electronically and choose direct deposit for payment to receive your refund as quickly as possible. Some of the best tax software on the market makes it easy for you to file fast and accurately, in addition to helping you get your maximum refund.

TurboTax

On TurboTax's secure site
  • Cost

    Costs may vary depending on the plan selected - click "Learn More" for details

  • Free version

    TurboTax Free Edition. ~37% of taxpayers qualify. Form 1040 + limited credits only.

  • Mobile app

    Yes

  • Live support

    Available with some pricing and filing options

Click here for TurboTax offer details and disclosures. Terms apply.

H&R Block

On H&R Block's secure site
  • Cost

    Costs may vary depending on the plan selected (Free Online, Deluxe, Premium, or Self-Employed) - click "Learn More" for details

  • Free version

    Yes (for simple returns only)

  • Mobile app

    Yes

  • Live support

    Available with some pricing and filing options

Terms apply.

Cash App Taxes (formerly Credit Karma Tax)

On Cash App's secure site
  • Cost

    $0 federal and state

  • Free version

    Yes

  • Mobile app

    Yes

  • Tax expert support

    No

What to do with your tax refund

Even if your tax refund ends up being smaller this year than last, any windfall of cash — in this case, close to $3,000 — can improve your financial health if you have a plan on how to use it. Since this year's tax season coincides with high interest rates that continue to rise, some money moves are more pressing than others.

For example, your credit card debt is getting more and more expensive as interest rates go up. If you carry a balance on any credit card charging interest, prioritize paying it down with your tax refund to free yourself from that high-interest debt.

A balance transfer credit card can be helpful for those needing to buy some time. The Citi Simplicity® Card offers an introductory 0% APR for the first 21 months on balance transfers (after, 19.24% - 29.99% variable APR; all transfers must be completed in the first four months). That means you can transfer your debt to the Simplicity Card and have almost two years to pay off the balance without accruing additional interest. Just make sure you have a plan for how to pay off the balance in the 21-month timeframe to avoid interest accruing again once the 0% APR period is up.

Citi Simplicity® Card

On Citi's Secure Site
  • Rewards

    None

  • Welcome bonus

    None

  • Annual fee

    $0

  • Intro APR

    0% Intro APR for 21 months on balance transfers from date of first transfer and 0% Intro APR for 12 months on purchases from date of account opening.

  • Regular APR

    19.24% - 29.99% variable

  • Balance transfer fee

    There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).

  • Foreign transaction fee

    3%

  • Credit needed

    Excellent/Good

If you don't have any credit card debt, deposit your tax refund into an accessible high-yield savings account that is offering an above-average return. The Lending Club High-Yield Savings stands out for offering one of the highest yields on your money. It also doesn't charge a monthly maintenance fee nor does it have a minimum balance requirement. You just need an initial $100 deposit to open an account.

LendingClub High-Yield Savings

LendingClub Bank, N.A., Member FDIC
  • Annual Percentage Yield (APY)

    5.00%

  • Minimum balance

    No minimum balance requirement after $100.00 to open the account

  • Monthly fee

    None

  • Maximum transactions

    None

  • Excessive transactions fee

    None

  • Overdraft fees

    N/A

  • Offer checking account?

    Yes

  • Offer ATM card?

    Yes

Terms apply.

Bottom line

No matter how small or large your tax refund is, putting it in the right place to avoid — or take advantage of — high interest rates is a smart move to make this year.

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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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