According to the IRS, your tax refund could be lower this year. Here’s why:
Here’s why your 2023 tax refund could be smaller and what you can do about it.
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With tax refunds expected to be larger this year than previous years, many Americans may be wondering how they can get their money back as quickly as possible. The IRS says the fastest way so far is electronically.
Every year, tax refunds provide a windfall benefit to millions of Americans. For most people, it’s the biggest payday of the year. Typically, 75% of Americans receive a refund each year.
The average refund in 2025 was $2,939, according to IRS data. Some tax experts expect the average to rise this year because of the tax and spending package that President Donald Trump passed in July. Nancy Vanden Houten, chief economist at the University of Oxford, said the total tax savings for taxpayers could reach an additional $50 billion because the IRS did not update its withholding schedules to account for the new provisions retroactively to early 2025.
Although the IRS can mail you a paper check, the fastest and safest method is through free electronic direct deposit, the tax agency says. More than 9 out of 10 taxpayers receive their refund through direct deposit, but the IRS wants to push that number even higher. The IRS began phasing out paper checks for individual taxpayers on September 30 of last year.
“Paper checks are more than 16 times more likely to be lost, stolen, altered, or delayed than electronic payments,” the IRS said. “Direct deposit also avoids the possibility of your refund check being returned to the IRS as undeliverable.”
How does direct deposit work?
If you are using tax software To complete your return:
Select Direct Deposit as your refund method and enter your bank account number and routing number.
The routing number that identifies your bank’s branch location can be found in the bottom left corner of your check or on your bank’s website. The account number is located in the bottom right corner of the check. Alternatively, sign in to your online banking account or call your bank branch.
If using Taxpayer:
Let the pro know that you would like to make a direct deposit.
You can even increase the speed. “A combination of direct deposit and electronic filing is the fastest way to receive your refund,” the IRS said.
If you are filing on paper:
However, you can still use direct deposit even if you are filing on paper. Please mark your return as direct deposit and include your information.
Please be sure to double-check your entries to avoid mistakes or delays. If you forget your account number or routing number, the IRS may send you a paper check.
What if I don’t have a bank account?
Don’t worry. There is still time to open a bank account. You can find it on the FDIC website or using the National Credit Union Administration’s Credit Union Locator Tool. You can also ask the creator if they offer other electronic payment options.
Otherwise, you may be able to deposit your refund to a reloadable prepaid debit card or mobile app. Many reloadable prepaid cards and mobile apps have a routing number and account number, which may be different from your card number. Check with your financial institution to see if your card or app can accept deposits, and double-check your routing and account numbers.
Can I split my refund across multiple accounts?
yes. This is a convenient way to manage your money by transferring a portion of your refund to your account for immediate use and a portion for future savings.
You can file your return electronically using tax software, or if you file a paper return, you can use IRS Form 8888, Refund Distribution.
You can split your refund in any proportion and deposit funds directly into up to three different accounts at a U.S. financial institution, reloadable prepaid debit card, or mobile app.
Refunds can only be deposited directly into a U.S. or U.S.-related account in your name, your spouse’s name, or both in the case of a joint account. Only three electronic refunds may be deposited to a single financial account or prepaid debit card.
How long does it take to receive my tax refund via direct deposit?
For taxpayers who file electronically and choose direct deposit, most refunds are issued within 21 days.
The IRS’ “Where’s My Refund” tool allows you to track when the IRS received your tax return, approved your refund, and issued your refund. The money should be in your account within five days from the date the IRS approves your refund.
The IRS says if you mailed a paper return and are expecting a refund, it could take more than four weeks for your return to be processed.
If you claimed the Earned Income Tax Credit or the Supplemental Child Tax Credit, the IRS cannot, by law, issue those refunds until mid-February. The report said it expects most EITC/Supplemental CTC-related refunds for early filers to be available in taxpayers’ bank accounts or debit cards by March 3, if they choose direct deposit and there are no other issues with their tax returns.
Can I track my refund?
yes. Whether you receive a paper check or have it deposited directly into one account or three accounts, you can use Where’s My Refund? Check out the features on the IRS website or call 800-829-1954.
You can check the status of your income tax refund after 24 hours if you filed electronically or 4 weeks if you filed paper. Information is updated once a day and overnight. Your return will require your Social Security or Taxpayer ID number, filing status, and exact refund amount.
If you split your refund, a “Where’s my refund?” message will be included confirming that your refund has been split, but it won’t specify the amount that will be credited to each account. You’ll see the estimated date of your deposit, and if the IRS adjusts your refund due to a calculation error or other reason, you’ll also see the amount of that adjustment.
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
