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Taxes

The average tax refund is larger than it was in 2023 -- here's why

Changes to the tax code mean your refund could be noticeably bigger.

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The deadline for most Americans to file their federal tax return has passed. And while the IRS is still processing paperwork, refunds for tax year 2023 are tracking considerably higher than they were in 2022.

As of April 19, 2024, the IRS processed about 136 million returns and refunded roughly $245 billion to U.S. taxpayers. That's 3.6% more than was refunded last year.

The average individual refund is also larger — and by an even wider margin.

What we'll cover

How much is the average refund?

So far in 2024, the average federal income tax refund is $2,850, an increase of 3.5% from 2023.

It's not entirely unexpected: To adjust for inflation, the IRS raised both the standard deduction and tax brackets by about 7%. That put some people into lower brackets and let taxpayers who weren't itemizing deduct more of their income.

How to file your taxes

For most Americans, the tax filing deadline was April 15, 2024. If you got an extension, you can hire a tax professional or do them yourself.

The IRS's free e-filing platform, Direct File, is only available in 12 states and other free online options have income and deduction limitations. Fortunately, there is great tax-prep software that addresses a variety of tax situations. Most guarantee their work, but TaxAct's accuracy policy is a standout: If you don't get the biggest refund possible, TaxAct will issue you a refund and pay the difference.

TaxAct

On TaxAct's secure site
  • Cost

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

  • Free version

    Yes

  • Mobile app

    No, the mobile app was discontinued

  • Tax expert support

    Yes, costs extra

Terms apply.

TurboTax's easy-to-use platform guides you through the filing process from start to finish, with a library of explainers, videos and tip sheets. You can also pay extra for live assistance or let a professional file for you.

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.

Most top tax-prep programs have a free tier, but the features and support options are limited. Among the paid editions, TaxSlayer Classic is one of the most budget-friendly — and doesn't have income or deduction limits.

TaxSlayer

On TaxSlayer's secure site
  • File your taxes for as low as $30.36 with TaxSlayer*

    Use Code: CNBC20

  • Cost

    Costs may vary depending on the plan selected.

  • Free version

    Yes (basic 1040)

  • Mobile app

    Yes

  • Tax expert support

    Yes, certain plans

*20% off your federal tax return. Offer is valid on federal tax returns e-filed by April 15, 2024, at 11:59 p.m. ET. Only valid for new or first time TaxSlayer users only. Promotion code must be entered at checkout. Offer is not applicable to state tax returns or additional products. Offer is valid for one-time use only and cannot be combined with any other coupons, promotions, discounts, or offers. Offer is nontransferable, cannot be sold or otherwise bartered, and is not applicable to previous purchases or returns.

When will I get my refund?

If you filed an electronic return and enrolled in direct deposit, you should get a refund within 21 days of filing, according to the IRS, as long as there are no issues with your return.

If you mailed a print return or filed an amended return, it will take at least four weeks for your refund to be processed.

To check your refund status, you can use the IRS' Where's My Refund? tool. You'll need to input your Social Security number, filing status and the refund amount listed on your return. The site is updated overnight, so checking it once a day is plenty.

What to do with your refund

Over a third (37%) of taxpayers expecting refunds say they'll use some of their refund on rent, groceries and other necessities, according to a January 2024 Credit Karma survey. Another 34% said they'll pay off outstanding bills.

If you're carrying a credit card balance, prioritize paying it down to free yourself from high-interest debt. Otherwise, you can deposit your refund into a high-yield savings account, where it could earn an APY of over 5% while still being readily available in an emergency. The Lending Club High-Yield Saving Account has one of the highest yields on the market and it doesn't carry a monthly maintenance fee or a minimum balance requirement beyond the initial $100 deposit.

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.

A hefty refund could be a healthy start toward a down payment on a car: MyAutoLoan is a loan aggregator that provides up to four bids from participating lenders with just one soft credit pull, so it won't ding your credit. It offers competitive rates and flexible terms, and some lending partners will work with borrowers with credit scores as low as 575.

MyAutoLoan

  • Annual Percentage Rate (APR)

    Starting at 5.49%

  • Loan purpose

    New vehicles, used vehicles, refinancing, private party and lease buyout

  • Loan amounts

    Starting at $8,000 (or $5,000 for refinancing)

  • Terms

    24 to 72 months

  • Credit needed

    FICO score of 575 or greater

  • Early payoff penalty

    None

  • Late fee

    Varies by lender

Terms apply.

You could also use that refund to book a dream vacation with the Capital One Venture X Rewards Credit Card, which earns 5X miles on flights and 10X miles on hotels and car rentals made through Capital One Travel, plus 2X miles on all other purchases.

The card's $395 annual fee is further offset by a 75,000-mile welcome bonus which you'll earn after spending $4,000 in the first 3 months of account opening, a $300 travel credit to use on Capital One Travel purchases, a 10,000-mile bonus on each account anniversary, access to Capital One and partner airport lounges and more..

Capital One Venture X Rewards Credit Card

  • Rewards

    10 Miles per dollar on hotels and rental cars, 5 Miles per dollar on flights when booked via Capital One Travel; unlimited 2X miles on all other eligible purchases

  • Welcome bonus

    Earn 75,000 bonus miles once you spend $4,000 on purchases within the first 3 months from account opening

  • Annual fee

    $395

  • Intro APR

    None

  • Regular APR

    19.99% - 29.99% variable APR

  • Balance transfer fee

    $0 at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you

  • Foreign transaction fees

    None

  • Credit needed

    Excellent

  • Terms apply.

FAQs

If you filed online and set up direct deposit, the IRS says you can expect a refund within 21 days. If you mailed a print return it could take at least four weeks.

To check your refund status, you can use the IRS' Where's My Refund? tool, which is updated once a day. You'll need to input your Social Security number, filing status and the refund amount listed on your return.

As of April 19, 2024, the average federal income tax refund is 3.5% larger than it was last year.

Bottom line

So far, the average tax refund in 2024 is outpacing 2023. If you're among the millions of Americans getting something back from the IRS, make the most of it — either by paying down debt, depositing it in an interest-earning account or financing a major purchase.

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Why trust CNBC Select?

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every tax article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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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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