Tax Refunds Expected to Be Higher This Year - What to Know
Tax season is right around the corner. Read on for everything that you need to know about how to file and track your return.
Tax Refunds Expected to be Higher This Year
Tax refunds are forecast to be higher than usual this year, making many Americans anxious to start the claim process. Approximately 75% of Americans get back money with their filing, translating to the most significant cash windfall of the year for most of the population. According to the Internal Revenue Service (IRS), the average refund amount in 2025 was $2,939.
The latest predictions indicate that this average will inch up even higher this year. The Trump administration's tax and spending package, which was passed over the summer, could amount to more money in people's pockets. In addition, the IRS did not update its withholding tables to include the new provisions retroactive to the beginning of 2025, meaning more savings on top of the usual deductions.
The fastest way to see your refund is to request an electronic deposit. More than 90% of all taxpayers elect to receive their money electronically. While the IRS is equipped to send out paper checks, it is trying to transition to an all-electronic method of payment. The agency says that paper checks are more than 16 times more likely to be delayed, stolen, lost, or altered when compared to electronic payments. Direct deposits also eliminate the risk of refund checks being marked as undeliverable and returned to the IRS.
It is easy to elect for a direct deposit. Simply select this refund method and submit the account and routing numbers of your bank account if using tax software to file your return. The routing number is what identifies the specific location of the bank's branch. This number is found on the bottom left corner of checks on the bank's website. The account number is specific to you, typically located on the bottom right corner of your checks. Alternatively, this number is found on your individual online banking account.
If you decide to use a professional tax preparer, you will need to tell them that you want a direct deposit and provide them with the necessary bank information. The fastest way to see the money hit your account is to combine a direct deposit with an electronic filing.
Paper filers can still use direct deposit. Filers using this method will need to mark direct deposit on the official form and include the pertinent information. Be sure to always double-check your filing for mistakes so that the process is not delayed.
Taxpayers who do not have a bank account can choose to direct the refund to a reloadable and prepaid debit card or mobile app to use. It is also possible to direct your refund to more than one account. Many filers choose to do this as a tool to manage their money throughout the year, earmarking some of the refund for immediate use while putting some in a savings account. The refund could be split in any proportion and directed to up to three different accounts, reloadable debit cards, or mobile apps.
It is important to note that the refund can only be directed into a U.S. account in the taxpayer's name, the spouse's name, or both if sending it to a joint account. A single bank account or prepaid debit card can receive no more than three separate electronic refunds.
When to Expect Your Refund
The big question on everyone's mind once they file is when they should expect the refund. Most refunds issued electronically are sent in less than 21 days. If you want a more precise date, the IRS "Where's My Refund" tool allows users to track when the agency received the tax return, when it was approved, and when it was issued. The money should hit the designated account within five days from the date of approval.
The IRS warns that it could take four weeks or longer to process a return that is sent via a traditional paper filing. The tracking feature can be used even if you choose to receive a paper check. Users can also call 1-800-829-1954 for more information and tracking details.
Filers will need a Social Security or taxpayer ID number in order to check the status of an income tax refund. The status of the refund can be checked online approximately 24 hours after e-filing or four weeks if sending in the paper filing. The information is updated every 24 hours, typically overnight.
Split refunds will note that the money was put into separate places; however, it will not specify the exact amount put into each account.
The IRS notes that the best way to ensure a speedy delivery is to begin to gather appropriate materials now. This will ensure that you are ready to file when the tax season opens on January 26.
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