Tax Season 2023: Here’s How Much the Average Taxpayer Is Getting Back

By Sam DiSalvo

April 16, 2023

Juanmonino / Getty Images/iStockphoto

One of the only rewarding parts of tax season is the refund that some taxpayers are entitled to. How much that refund is depends on many factors, and some of those factors change from year to year. Here’s a comprehensive look at about how much you can expect your tax refund to be in 2023, and why it might be lower than it was in 2022. Additionally, tax experts weigh in on what the best use of your refund is, no matter the amount. 

How Much Will My Tax Refund Be? 

Tax refunds are issued because you paid more in income tax throughout the prior year than you needed to. There are also tax credits available to those who qualify. These credits include (but are not limited to) the Child Tax Credit and the Earned Income Tax Credit. Qualifying for these can also result in getting a tax refund.

Below you’ll find the average amounts of refunds that have been issued so far in 2023 — by week — compared with those issued in 2022, according to the IRS.

Why Is My Tax Refund Lower This Year?

You might notice that the average refund last year is $355 higher than what people are getting this year. The main reason why tax refunds are lower in 2023 is that some of the tax breaks that were available due to the pandemic aren’t anymore. Levon L. Galstyan, certified public accountant at Oak View Law Group, explains that if you received money during 2021 due to one of these tax breaks, you’re probably seeing a lighter refund this year.

“You might get a lower refund this year if you received more money on your 2021 tax refund because of the expanded Child Tax Credit or stimulus payments. That’s because the maximum amount for the Child Tax Credit is now lower at $2,000 per dependent. Pandemic tax measures like Earned Income Tax Credit, Child and Dependent Care Credit and charitable giving deductions are no longer effective.”

Galstyan also explains that the Earned Income Tax Credit (EITC) is lower this year than it was before. If you qualified for the EITC, you could claim up to $1,502, but for the 2022 tax year, the maximum amount you can claim is only $560, which is $942 less than in 2021.

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What Should I Do With My Tax Refund?

Once you have your tax refund, you might be tempted to treat yourself to a big purchase. That’s a fine idea, provided there aren’t other pressing issues you’d like to take care of. Galstyan explains that if you have debt, you should think about applying your refund to pay that off first. “If you are in a high-interest debt burden, such as credit card or personal loans, consider using your tax refund to pay off or pay down the debt. This will help you save money on interest charges in the long run and improve your overall financial health.”

Galstyan also recommends saving the money for a rainy day. “An emergency fund can help you prepare for unexpected expenses, such as medical bills or car repairs.”

Another option that can reduce your tax liability for next year is to invest in retirement. 

“If you still need to max out your retirement contributions for the year, consider using your tax refund to contribute to your 401(k) or IRA,” Galstyan says. 

Though these are all very prudent ideas for your refund, Galstyan says that if you need a getaway, give it to yourself. After all, taxes can be very trying for everyone, and it’s not a bad thing to reward yourself. “If you need a break, consider using your tax refund to take a vacation or travel to a new destination. This can be a great way to recharge and create new memories.”

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