Three Reasons Why Your Tax Refund May Increase This Year

The portrait of Benjamin Franklin on the one hundred dollar bill peering from behind a check issued by the U.S. Government.

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Tax refunds are coming in smaller this year, and the drop may be due to certain family tax credits haven’t been delivered yet.

The IRS reported that the average refund amount via direct deposit was $2,252 based on 33 million tax returns processed through February 14. That’s down 31% from $3,265 during the same period last year when the agency processed over 34 million returns.

It’s still early in the tax season, meaning refund amounts still have time to even out or climb higher as more tax returns come in.

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Additionally, under current law, the IRS cannot issue refunds for tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) before mid-February. Those numbers aren’t reflected in the latest statistics.

Here’s what you can expect regarding your refund amount in the coming weeks.

Tax refunds average amount

Though IRS tax refunds came in $1,000 smaller this week, here are some key reasons why refunds may increase for some taxpayers.

Tax experts this year hinted that refunds could come in slightly larger due to inflation-related changes to the standard deduction and tax brackets for 2024. There’s also an extra standard deduction benefit for people over 65.

These changes impact your taxable income and generally translate to a bigger refund. That’s if your filing status and tax credits are the same as last year.

Here are three reasons why your refund may be better this year.

1. Larger standard deduction

Most taxpayers benefit from the standard deduction, and there’s good news this year. The 2024 standard deduction amounts for returns you’re filing now, in early 2025, are slightly larger.

That means you’ll get a broader chance to lower your tax liability and potentially get a larger tax refund. For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $730 from the previous year.

For couples who file jointly, the standard deduction is $29,200. As for heads of households, their deduction is $21,900 for the 2024 tax year.

If you are at least 65 or blind, you can claim an additional standard deduction benefit worth $1,950 for 2024. The extra deduction amount is doubled if you and your spouse meet that criteria.

Planning ahead? The IRS announced the 2025 standard deduction, and it’s the largest it has ever been.

2. Tax brackets adjusted for inflation

The IRS adjusts tax brackets each year to reflect upticks in the cost of living, to prevent what is sometimes referred to as “bracket creep.”

However, if a taxpayer's income increases more than the inflation rate, they could move into a higher bracket. In some cases, that can impact the amount of tax credits and deductions they are eligible to claim.

For instance, popular credits like the child tax credit phase out the higher your income level is.

The federal income tax rates haven’t changed for the 2024 tax year: 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

For more information see our guide: 2024 and 2025 Federal Tax Brackets and Income Tax Rates

3. Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is an often-overlooked refundable tax break available for workers with low and moderate incomes, with or without children.

As Kiplinger reported, the amount you get depends on your income, filing status, and the number of qualifying children in your household. Most importantly, due to 2024 inflation adjustments, the EITC credit amounts and income thresholds are slightly larger than a year ago.

No qualifying children: $632
1 qualifying child: $4,213
2 qualifying children: $6,960
3 or more qualifying children: $7,830

Some good news: the EITC income and credit thresholds increased for 2025. That could lead to a bigger refund next year as well.

Check your refund status for updates

Tax season is underway, and the IRS has already received over 33 million tax returns through February 14. The tax agency expects more than 140 million individual tax returns to be filed by the April 15 deadline.

If you’ve electronically filed your tax return, the ‘Where’s My Refund’ tool can show you the status of your tax refund as early as 24 hours after the IRS receives your return. Those who file a paper return can check their refund status four weeks after mailing a return.

As mentioned, there’s one exception. The IRS isn’t legally allowed to issue EITC or Additional Child Tax Credit (ACTC) refunds before mid-February, which may keep some refunds on hold for early filers.

If you electronically filed your tax return and expect an EITC or ACTC refund, you can check your refund status by Feb. 22. The first refunds should be delivered by March 3, according to the IRS.

Remember, your tax refund amount may be slightly bigger this year if your income levels and tax brackets haven’t changed significantly. So stay tuned for more updates as the tax season continues.

For more information and live updates, follow our tax team on Filing Taxes 2025: Live Updates, Tax Tips, and Strategies from Kiplinger.

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Gabriella Cruz-Martínez is a finance journalist with 8 years of experience covering consumer debt, economic policy, and tax.

Gabriella’s work has also appeared in Yahoo Finance, Money Magazine, The Hyde Park Herald, and the Journal Gazette & Times-Courier.

As a reporter and journalist, she enjoys writing stories that empower people from diverse backgrounds about their finances, no matter their stage in life.