IE 11 is not supported. For an optimal experience visit our site on another browser.

Why your 2023 tax refund might be smaller than 2022's

The average income tax refund jumped to $3,253 in 2022, up from $2,863 the previous year.
IRS 1040 Individual Income Tax forms.
The IRS is taking extra measures to ensure against identity theft and tax fraud, meaning refunds could be delayed. Michael Nagle / Bloomberg via Getty Images file

The Internal Revenue Service is alerting taxpayers about a number of changes hitting in the 2023 tax filing year.

Among the most significant: Your tax refund, if you are eligible for one, may be smaller than the one you received in 2022.

That's because there were no federal stimulus payments issued in 2022 — and many taxpayers received their stimulus checks alongside the refunds they got after filing their 2021 tax returns.

The average refund jumped from $2,863 in 2021 (for the 2020 tax filing year) to $3,253 in 2022 (for the 2021 tax filing year).

Another change: Taxpayers who take the standard deduction instead of itemizing their deductions won’t be able to use their charitable contributions to help lower their taxable income. The tax preparation website CPA Practice Advisor notes that in 2021, the IRS allowed individuals to deduct $300 per person, or up to $600 per family, in charitable contributions even if they didn’t itemize other deductions. That allowance will no longer be available.

Finally, the IRS is reminding taxpayers transactions that earned them $600 or more must be reported, including ones made on third-party apps like Venmo. Prior to 2022, tax forms were required only if the transaction exceeded $20,000.

But you do not have to report money received through third-party payment applications from family or friends that came as personal gifts or reimbursements for personal expenses, the IRS says.

The agency is also warning filers not to expect their refunds by a certain date, adding that it is taking extra measures to ensure against identity theft and tax fraud.

That additional due-diligence by the IRS means it could take longer for the agency to review your tax return.

As context, the IRS said, as of Nov. 11, it was still processing 3.7 million individual returns, including tax year 2021 returns and late-filed prior year returns. Of those, it said, 1.7 million of them required error correction or other special handling, and 2 million were paper returns waiting to be reviewed and processed.