The IRS has initiated the 2024 tax season by commencing the acceptance of tax returns, aiming to enhance services for taxpayers this year. As individuals gear up to navigate the tax process, the primary concerns revolve around the size of potential tax refunds and the duration for the IRS to disburse them.
A recent study from Intuit Credit Karma reveals that over half of Americans plan to file their taxes early in 2024, driven by the desire to expedite their tax refunds. Last year, the average refund check approached $3,200, representing a significant financial boost for many families.
The timing of tax refunds has emerged as a key focus for taxpayers, especially given the challenges faced during the pandemic when IRS backlogs led to delays in refund processing.
However, for the ongoing tax season, the IRS is leveraging new funding from the Inflation Reduction Act, enabling the hiring of additional customer service representatives and improvements to services like the “Where’s My Refund?” feature.
Mark Steber, Chief Tax Information Officer at Jackson Hewitt, emphasizes the advantages of filing early, not only for expeditious refund processing but also for safeguarding personal data against fraud.
Scammers often attempt to file early using taxpayers’ information, aiming to claim refunds before the legitimate filers can submit their returns.
Key details to be aware of for the 2024 tax season:
Filing Dates: The IRS started accepting tax returns on January 29 and will continue until April 15. Residents of Maine and Massachusetts have until April 17 due to state holidays, while individuals in federally declared disaster areas may receive extensions. Filing extensions are also available, allowing taxpayers until mid-October to complete their returns.
Refund Issuance: The IRS states that most taxpayers receive their refunds within 21 days. Filing on the earliest possible date, January 29, should result in a refund by February 19.
However, this is a guideline, not a guarantee, and certain returns may require additional time for review. Notably, the 21-day turnaround primarily applies to electronically filed returns, while paper returns may experience lengthier processing times.
Refund Status: Taxpayers can check their refund status through the “Where’s My Refund?” tool on IRS.gov or the IRS2Go app. The IRS has updated the tool for the current season, providing more details about the refund status, including whether additional information is required from the taxpayer.
Child Tax Credit: A deal is in progress to expand the Child Tax Credit, potentially introducing retroactive changes for 2023. While waiting for legislative developments may be tempting, tax experts advise against delaying filing, as any adjustments will likely be addressed later through additional checks or alterations to tax refunds.
Tax Brackets: The IRS has adjusted tax brackets for inflation in 2023 and 2024. The brackets for 2023 saw a 7% upward adjustment to accommodate high inflation, while the brackets for 2024 have been increased by approximately 5.4%.
Potential for Bigger Refunds: Some individuals may witness larger refunds in 2024, with a potential increase of up to 10% compared to the previous year. Workers whose income did not keep pace with inflation are more likely to experience significant refund boosts.
Approximately three-quarters of Americans anticipate receiving a tax refund this year, while about one-quarter believe they will see an increase in their IRS checks, according to Credit Karma’s findings. Overall, the 2024 tax season promises a mix of opportunities and considerations for taxpayers navigating the complex landscape of filing and refunds.