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IRS delivers bad news for American taxpayers

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Millions of Americans rely on tax refunds each year, but the average refund was down about 3% for 2023 compared to the previous year.

However, some experts predict refunds could end up larger in 2024, with some taxpayers receiving up to 10% more than last year.

This is because IRS tax brackets and standard deductions are adjusted annually for inflation, and inflation was very high in 2023 at over 7%, resulting in a more significant adjustment that impacts more taxpayers.

While refunds were smaller on average this year, the larger projected refunds for 2024 would provide some financial relief due to high inflation hurting household budgets.

Most taxpayers have until mid-April to file returns or request extensions.

Mark Steber, chief tax information officer at Jackson Hewitt, said, “For anybody whose income did not outpace inflation, they should do better.”

“It’s not even voodoo or marketing spin, it’s pretty much just science,” he explained.

Eric Bronnenkant, head of tax at online financial advisor Betterment, said, “Once you’re relatively certain that you have all of your tax documents, file as soon as you can so that you can start investing your money.”

“Because, in general, the IRS doesn’t pay you interest on your refunds. So, getting that money in your hands sooner is better, for sure,” added the advisor.

Filing electronically and ensuring accuracy can help receive refunds faster, though some returns may require additional IRS review.

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