As of Feb. 16, the IRS had already issued nearly $67 billion in refunds, according to the agency. The average tax refund was $3,207 — 2.1 percent above last year.
Here’s what you need to know if you’re expecting a refund.
How soon after I file my return can I get my refund?
If you file electronically and choose direct deposit for your refund, it will typically show up in your bank account in about 21 days, according to the IRS.
If you mail your return, it can take four weeks or more to get your refund.
Where can I check on the status of my refund?
The timing depends on how you file, but there are multiple tools to help you access the information.
You can download the “IRS2Go” app to check your refund status or call 800-829-1954 for an automated update. You can also speak with a representative by calling 800-829-1040.
You can also use the “Where’s My Refund?” tool at irs.gov/refunds to check the status of your refund 24 hours after e-filing. It can take four weeks or more if you mailed your return to see information on your refund status.
Thanks to the extra funding the agency received from the Inflation Reduction Act, the IRS has reported improvements to the “Where’s My Refund?” feature. The enhancements provide the following information:
- Whether your return was received and if it’s being processed.
- Whether your refund amount was approved and if the IRS is preparing to issue it.
- Whether your refund is on the way. The IRS said it may take five days to deposit the money in your bank account if you filed electronically. If you’re getting a check, it could take several weeks for the refund to arrive by mail.
Why is my refund taking so long to arrive?
Your refund may be delayed because there’s an error or missing information, or because the IRS has pulled it for extra review. The latter could happen if you claimed the child tax credit or an earned income tax credit.
Your return may also have been flagged because of identity theft. Someone may have stolen your personal information and filed a fraudulent return in your name to collect a bogus refund.
If there’s a problem, you should receive a letter from the agency.
Can I buy savings bonds with my refund?
You can choose to buy up to $5,000 in U.S. Series I Savings Bonds in a calendar year using your refund.
Series I savings bonds are designed for inflation protection. The current rate is 5.27 percent for I bonds issued from Nov. 1, 2023, to April 30.
There are two components to the return for the bond — the fixed rate and the inflation rate. The fixed rate, which right now is 1.30 percent, stays the same for the life of the bond. The inflation rate changes every six months. The fixed rate of return and the semiannual inflation rate are announced by the Treasury Department each May and November.
You can use all or part of your tax refund to purchase I bonds. Your request for bonds must be in increments of $50, and you buy them at face value, meaning if you pay $50 using your refund, you get a $50 savings bond.
Upon purchase, you’ll be issued paper bond certificates. If you’re married and filed a joint return, the bonds will be issued in both your names.
Can I deposit my refund into more than one bank account?
You can split a refund and have it sent to as many as three different U.S. financial institutions.
Your refund can be directly deposited into a checking or savings account. If filing electronically, follow the tax software instructions. Use IRS Form 8888 if you choose to buy U.S. Savings Bonds or if you’re splitting your refund to deposit in more than one account. You don’t need Form 8888 if you want the IRS to deposit your refund in one account.
Why do people keep saying I shouldn’t be excited about getting a refund?
You might get a substantial refund if you’re eligible for certain tax breaks, such as the refundable earned income tax credit. Some credits are refundable, which means you get money back even if you don’t owe any tax.
But many people intentionally have their employer withhold too much money so that they can get a large refund — year after year. Or they use their refunds as a forced savings plan.
More than a quarter of Americans (28 percent) expect a refund plan to use most or all of the money to increase their savings, according to a new survey by Bankrate.com.
However, there are good reasons to adjust your withholdings so that you either just get a tiny refund or owe a tiny amount, rather than get a five-figure refund.
Your money could be earning interest in a high-yield savings account or a higher return in an investment account. Moreover, although inflation is coming down, prices are still higher for a lot of consumer goods. Could you use the money to help pay for day-to-day expenses?
Many taxpayers wait to get a refund to pay off debt. It was the second most cited use, according to Bankrate.
Something to keep in mind: The cost of credit card debt has spiked. The average rate for accounts on which interest is assessed was 22.75 percent in November 2023, according to the Federal Reserve.
Now is the time to fill out a new W-4 form so your employer doesn’t withhold too much or too little. You can use the “Tax Withholding Estimator” at irs.gov to help estimate the amount of income tax your employer should withhold from your pay.
Bottom line: Unless you qualify for certain refundable tax credits or have a change in your tax situation — bought a home, had a baby, or got married — Uncle Sam isn’t sending you “new” money. He’s sending back money that you’ve given the government as an interest-free loan.
About 25,000 cases involve people whose income is known to the agency to be above $1 million, IRS Commissioner Danny Werfel said. About 100,000 instances stem from people with income from $400,000 to $1 million, as reported to the IRS by their employers and banks.
Although the IRS will send out 125,000 notices, the actual number of taxpayers involved may be fewer, as many of them failed to file in multiple years.
If they don’t file within about two months of getting the letters, the IRS can take further action, including eventually filing a “substitute” tax return on the person’s behalf and then levying money from their paycheck or bank account to collect the taxes owed.
“When people don’t file their taxes, they need to know there’s a consequence,” Werfel said.
Failing to file one year can lead to a snowballing effect, a lawyer said. “They forget one year, and then the next year, they say, ‘Well, if I file now, I’ll get in trouble for the year before,’ … Pretty soon, 15 or 20 years later, they’re in a lot worse trouble,” said Rob Kovacev, a former Department of Justice attorney who said that more than 15 years ago, before IRS budget cuts, his docket was full of non-filer cases, some for very rich people.
As Congress slashed the IRS’s funding in the last decade, the agency’s shrinking staff did less to enforce tax compliance — including one of the most basic tasks, simply sending letters to people who fail to file their tax returns. Werfel said the “non-filer program” last operated in 2016, with only sporadic attempts since then to contact non-filers.
He described that lapse as “one of the clearest examples of the need to have a properly funded IRS.” In 2022, Congress granted the agency an additional $80 billion over 10 years, though Republicans in Congress later clawed back $20 billion. The agency went on a hiring spree last year, which Werfel said gives the IRS enough workers to contact non-filers and process the returns once they’re filed, or pursue further action against those who don’t file.
Werfel said the returns represent hundreds of millions of dollars in unpaid taxes, on more than $100 billion of income.
Few of the 125,000 missing returns will lead to criminal tax evasion cases.
Thursday’s announcement reflects the Biden administration’s decision to focus tax-compliance efforts on high-income earners. The administration has said it will not increase audit rates for taxpayers who earn under $400,000 a year.
Eventually, the IRS said, it will send letters to non-filers at all income levels. The letters for people making less than $400,000 will focus on the fact that they might be missing out on a refund. More than 1 million households annually miss out on credits they can claim, such as the Earned Income Credit, because they didn’t file a tax return, the IRS said.