What an Average Tax Refund Looked Like Over the Past 10 Years
Even though common financial wisdom says taxpayers shouldn’t look forward to getting a refund, there’s no denying that it’s exciting to get money back from the government every year. In fact, some Americans actually look forward to tax season, as it has become an annual ritual to get a sizable check from the IRS.
But how much money do Americans get in the form of tax refunds, and how much has that amount changed over the years? Here are some IRS-provided statistics regarding tax refunds, along with a look at what a refund really is and whether you should even want one.
Average Refund Amounts So Far in 2023
As of mid-February 2023, the IRS already has issued more than 8 million tax refunds worth about $15.7 billion. The average size of those refunds was $1,963, down a bit from the $2,201 at the same time in 2022.
How Much Has the Average Refund Been Historically?
Perhaps surprisingly, the average refund historically has been relatively stable. According to data from the IRS, here are the average refund amounts as of mid-February over the past 10 years:
- 2022: $2,201
- 2021: $2,880
- 2020: $2,013Â
- 2019: $2,640
- 2018: $3,169
- 2017: $3,137
- 2016: $3,128
- 2015: $3,224
- 2014: $3,211
- 2013: $2,944
Generally speaking, refunds have tended to run in the $2,600 to $3,000 range. In 2020 and 2022, refunds were a bit below recent averages, perhaps due to the effects of the pandemic.Â
What Makes Refund Amounts Fluctuate From Year to Year?
Any number of factors can contribute to the fluctuation in refund amounts from year to year, from rising and falling incomes to changing withholding amounts. But many experts are predicting that refunds will continue to remain below levels from tax year 2021 thanks to a few factors.
One of the primary reasons is that the enhanced Child Tax Credit that was implemented during the pandemic was phased out after tax year 2021. That brings the Child Tax Credit back down to $2,000 per child from elevated levels of $3,000 to $3,600.
Some taxpayers might see a refund reduction thanks to the ending of the pandemic-era above-the-line deduction for charitable contributions. Still others might see a higher tax bill in the form of capital gains taxes on the back of a booming year in the stock market.
Is It Really a Good Strategy To Get a Tax Refund?
If you’re getting a smaller tax refund in 2023 — or none at all — it isn’t entirely bad news. After all, your tax refund isn’t some generous gesture by the IRS; it’s simply a repayment of your overpaid taxes throughout the year.
When you pay more in taxes throughout the year than you owe, you’re essentially lending the IRS money interest free. Instead of handing it over to the IRS, you could save or invest that money, use it to pay down debt or spend it on some of your basic needs. For these reasons, most tax and financial experts recommend against getting a tax refund.
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