Millions of Americans have already filed their 2024 federal tax returns, with many receiving their refunds earlier than expected. While the IRS is still processing returns, refund amounts this tax season have been higher than last year’s.
According to recent data, the IRS has refunded $124.8 billion so far, an 8.1% increase compared to the same period in 2024. Additionally, the average individual refund has risen from $3,182 to $3,382, a noticeable boost for taxpayers.
If you haven’t filed your tax return yet, here’s what you need to know about the increased refunds, tax bracket adjustments, and upcoming deadlines.
Tax Refunds
So far, tax refunds in 2025 are larger than in 2024, with direct deposit refunds seeing an even greater increase:
| Year | Total IRS Refunds (in billions) | Average Refund | Direct Deposit Average Refund |
|---|---|---|---|
| 2024 | $115.5B | $3,182 | $3,244 |
| 2025 | $124.8B | $3,382 | $3,436 |
| Increase | +8.1% | +6.3% | +5.9% |
Although the IRS has processed fewer returns this year (down 3.6%), total refunds and individual payouts have risen due to inflation adjustments and tax bracket changes.
Higher Tax Refunds
The increase in refunds is largely due to IRS adjustments for inflation, which have affected:
Higher Standard Deduction
The standard deduction has increased, reducing taxable income for many Americans.
| Filing Status | 2024 Tax Year | Increase from 2023 |
|---|---|---|
| Single / Married Filing Separately | $14,600 | +$750 |
| Head of Household | $21,900 | +$1,100 |
| Married Filing Jointly | $29,200 | +$1,500 |
Adjusted Tax Brackets
With inflation adjustments, some taxpayers have been moved into lower tax brackets, reducing their overall tax liability.
Increased Tax Credits
Refundable tax credits, such as the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), have also been adjusted, leading to larger refunds for eligible taxpayers.
Fewer Tax Returns Processed
Despite higher refund amounts, the IRS has processed 3.6% fewer returns compared to last year. Additionally, the agency has experienced:
- A 43.2% drop in online visits to IRS.gov.
- Budget cuts and job reductions, with plans from the Trump administration to reduce the workforce by half through layoffs and attrition.
With fewer resources, taxpayers may experience longer processing times, especially as the April deadline approaches.
Deadlines
Tax season officially began on January 27, 2025, and the deadline to file without penalties is April 15, 2025.
If you haven’t filed yet, consider e-filing with direct deposit to receive your refund faster. The IRS expects tax filing numbers to stabilize as more returns are submitted in the coming weeks.
Significant
Larger tax refunds in 2025 are mainly due to inflation adjustments, including a higher standard deduction and updated tax brackets. While fewer tax returns have been processed, those who have filed are seeing bigger refunds on average.
With the April 15 deadline approaching, taxpayers should file early to avoid delays, especially given IRS budget cuts. If you’re eligible for a higher refund, make sure to take full advantage of the updated tax benefits!
FAQs
Why are tax refunds higher in 2025?
Refunds are larger due to inflation adjustments, higher standard deductions, and updated tax brackets.
What is the average tax refund in 2025?
The average tax refund in 2025 is $3,382, a 6.3% increase from 2024.
When is the tax filing deadline for 2025?
The last day to file taxes without penalties is April 15, 2025.
Has the IRS processed fewer tax returns this year?
Yes, the IRS has processed 3.6% fewer returns compared to last year.
How can I get my refund faster?
File electronically and choose direct deposit for the quickest refund processing.
