Why Your Tax Refund Might Be Smaller This Year
- Author: Miguel Waters
- Posted: 2025-09-21
The tax filing season kicked off on February 19, 2025, and it's set to wrap up on April 15. This is the period when everyone in the U.S. needs to file their taxes with the Internal Revenue Service (IRS), and for many, it's also a time to look forward to getting a tax refund.
However, there's a noticeable change this year: the IRS has announced that the average refund for 2025 is significantly lower than last year's, by about 32.4%. So, if you're expecting a tax refund, it might be smaller than you hoped.
The IRS processes millions of tax filings during this period, accepting both paper and digital submissions. They've been working hard to make tax filing easier and faster, particularly by improving digital services, after facing challenges like delays and staffing shortages in the past.
Why Are Refunds Smaller in 2025?
Based on the IRS's data up to February 14, 2025, early filers, who often have lower to medium incomes, are seeing smaller refunds. However, the IRS points out that as more people file their taxes, these numbers typically balance out.
Another reason for this early trend could be that people with higher incomes or more complex tax situations often file closer to the deadline or even ask for an extension, which can stretch up to October 15.
Moreover, the current numbers don't account for refunds from the Earned Income Tax Credit and the Additional Child Tax Credit, which start going out in the second half of February.
Tax professionals suggest that you start working on your tax returns early to avoid the last-minute rush and ensure you get your refund without unnecessary delays.
Hopefully, this explanation gives you a clearer picture of this year's tax season and why refunds are rolling out differently.
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