The amount of 2024 tax refunds that have been given has been made public by the Internal Revenue Service (IRS). Millions of Americans get millions of dollars in refunds from the IRS for taxes they paid each year.
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IRS Announces Refund Increase
According to the IRS, there has been no rise in the number of audits of tax returns for individuals earning less than $400,000 annually.
The IRS Announces a Refund Increase for the previous tax year on April 18. The IRS attributed them to the extra financing made possible by the Inflation Reduction Act (IRA) of the Biden administration, which gave an additional $80 billion to the government agency.
The IRS paid $659 million in refunds out of the almost $4.7 trillion gathered from 271.5 million tax returns in 2023; this is a 2.7% increase from the 2022 fiscal year.
Refunds of excess taxes paid to the federal or state government are given to taxpayers as tax refunds. Under the Direct File pilot program, which launched this year, filers in 12 US states can prepare and submit basic tax returns to the IRS for free.
- IRS2Go Refund Status
- IRS Refund Pay Schedule 2024
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The IRS Announced New Tax Brackets for 2024
The Internal Revenue Service said on Thursday that both the usual amount that Americans may deduct from their taxes and the income tax bracket thresholds are rising.
The changes, which are two of many modifications made in response to growing inflation, will require taxpayers to make more money to be eligible for higher income categories and the higher rates that go along with them starting in the tax year 2024.
For example, individuals with an annual taxable income above $609,350 or married couples filing jointly who make over $731,200 will be subject to the highest rate of 37%.
This is an increase above the tax year 2023 levels of $578,125 and $693,750, respectively, for which you would owe taxes in April.
The standard deduction, which is a fixed amount that you may use to lower your taxable income if you choose not to itemize, will increase from $13,850 in 2023 to $14,600 for single filers in 2024. Married couples filing jointly will now deduct $29,200 instead of $27,700.
How to file their returns and claim their refunds?
As taxpayers prepare to file their returns and claim their refunds, here are some helpful tips to maximize their tax benefits:
- File Electronically: Opt for e-filing instead of paper filing to expedite the processing of your tax return and receive your refund faster.
- Check Eligibility for Credits: Determine if you qualify for tax credits such as the EITC, CTC, or other deductions and credits that could increase your refund amount.
- Review Withholding: Assess your withholding to ensure it aligns with your tax liability. Adjustments may be necessary to avoid overpaying or underpaying taxes throughout the year.
- Seek Professional Assistance: If you’re unsure about certain tax implications or need guidance on maximizing deductions, consider consulting a tax professional for personalized advice.
IRS Refund Increase Key Highlights
The IRS has outlined several key highlights of the refund increase initiative:
- Average Increase: On average, taxpayers can expect to see a 10% increase in their tax refunds compared to the previous year. This boost is attributed to various factors, including changes in tax laws, economic stimulus measures, and adjustments to withholding rates.
- Enhanced Credits: The IRS has expanded certain tax credits, such as the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), to provide greater assistance to low and moderate-income families. These enhancements will result in higher refunds for eligible taxpayers.
- Revised Withholding Tables: The IRS has updated its withholding tables to reflect the latest tax law changes and ensure that taxpayers have the correct amount of taxes withheld from their paychecks. By adjusting withholding rates, the IRS aims to prevent over- or under-withholding, leading to more accurate refunds.
- Faster Processing: With advances in technology and streamlined processes, the IRS has expedited the processing of tax returns, enabling quicker issuance of refunds to eligible taxpayers. This acceleration is part of the agency’s ongoing efforts to improve efficiency and customer service.
IRS Refund Increase Impact on Taxpayers
The announcement of increased tax refunds has generated widespread interest and anticipation among taxpayers. Here’s how it may impact different groups:
- Low and Moderate-Income Families: For families relying on tax refunds to cover essential expenses, the increase in refunds can provide much-needed financial relief. The expanded tax credits, such as the EITC and CTC, will particularly benefit these households, helping them make ends meet and support their children’s needs.
- Middle-Class Taxpayers: Even middle-class taxpayers stand to benefit from the refund increase, as it can provide extra funds for savings, debt repayment, or discretionary spending. The additional money can contribute to economic stability and bolster consumer confidence, which is crucial for overall economic recovery.
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