Tax season is officially here, and the IRS has already started issuing refunds. This year, the average tax refund is $2,065, according to the IRS’s latest report. If you’re wondering whether you qualify for this refund amount or simply want to know how to maximize your return, this guide is for you.
In this article, we will cover how to determine your eligibility, ways to increase your refund, and how to track the status of your IRS refund step-by-step.
Why Are Tax Refunds Averaging $2,065?
The average tax refund of $2,065 is a result of overpaid taxes or refundable credits. The refund amount is based on various factors such as tax withholdings, deductions, and credits.
For many taxpayers, the refund reflects an overpayment through paycheck withholding or eligible tax credits like the Earned Income Tax Credit (EITC) or Child Tax Credit.
Factors That Influence Your Refund Amount:
Income Level: Higher-income individuals tend to get smaller refunds because they may not qualify for as many refundable credits.
Filing Status: Married couples filing jointly often see larger refunds than single filers.
Tax Withholdings: The more tax withheld from your paycheck throughout the year, the larger your potential refund.
Tax Credits: Tax credits, especially EITC and Child Tax Credit, can significantly boost your refund.
How to Maximize Your Tax Refund
To make the most of your refund, consider the following tips and strategies:
1. Claim All Eligible Credits
Be sure to check your eligibility for credits such as:
Earned Income Tax Credit (EITC)
Child Tax Credit
Education Credits
These credits can add a substantial amount to your refund.
2. Itemize Deductions
If your itemized deductions exceed the standard deduction, you can receive a larger refund. Common itemized deductions include:
Mortgage interest
Medical expenses
Charitable contributions
State and local taxes
3. File Electronically and Choose Direct Deposit
E-filing is faster and more accurate than paper filing.
Choosing direct deposit for your refund ensures that you receive it faster.
Example of How Tax Credits Work
Let’s say you’re a single parent with two children, and you earn $40,000 annually. You could qualify for the Earned Income Tax Credit (EITC), which might add over $3,000 to your refund, depending on your exact income and filing status.
How to Check Your IRS Tax Refund Status
Wondering when your refund will arrive? Here’s how you can track it:
- Wait 24-48 hours after e-filing before checking your refund status.
- Visit the IRS Where’s My Refund? tool.
- Enter your Social Security number, filing status, and refund amount.
- Check your refund status, which is updated daily.
Common Reasons for Delays
While most refunds are processed quickly, there are some common reasons for delays:
1. Errors in Filing
Any discrepancies or mistakes in your tax return can delay processing. Double-check your information before submitting.
2. Claiming EITC or Child Tax Credit
These credits require additional verification, which can take longer.
3. Paper Returns
Paper returns take much longer to process than e-filing. To avoid delays, file your taxes electronically.
Understanding your eligibility for IRS tax refunds and utilizing available credits and deductions can help you maximize your $2,065 average refund for this tax season.
By filing electronically, claiming all available credits, and checking your refund status, you can ensure a smoother filing process and a larger refund. Make sure to keep track of your status using the IRS refund tool and follow the tips mentioned above to minimize any delays.
