BUFFALO, N.Y. (WBEN) The average tax refund this year is a good deal smaller than a year ago. The average refund amount in 2023 is $3,079 according to the latest date from the IRS. This is about an 11% drop from what the average refund amount was this time last year.
Why are refunds lower? Expiration of generous tax credits is one reason.
"The child tax credit has been cut so much," said Esther Gulyas, 'The Tax Lady', President and CEO of EG Tax. For children under the age of 6, you lose a $16-hundred dollar credit. And for children 6 to 17, that has gone down a thousand. So a family of four could easily pay an extra 4-thousand dollars in taxes."
On top of that, the daycare credit went back to the way it used to be. "it's a big deal," added Gulyas.
The important thing that she wants people to know, if you're really disappointed with your tax return, is to go to your payroll department and change your withholding.
You can also open an IRA to mitigate some of the pain this year. You have until April 18 to do that for your 2022 taxes.
On the New York State return, Gulyas said it looks like the state took out more taxes than the federal government, which is resulting in many people getting larger New York State refunds.
Speaking of the state return, many people don't realize that the deductions that were taken away on the federal return, are still available on the state return.
"The New York return is a very complicated return. I think it's just as complicated as the federal, if not more so," noted Gulyas. "It has all kinds of credits, refundable credits. So don't just breeze through the state return. It can save you money too."
If you’re looking to get your tax refund as fast as possible, make sure to e-file and opt to receive your refund through direct deposit. The IRS says that direct deposit is the faster, safest way to get your tax refund.
The deadline to file taxes this year is April 18.