© 2024 Arizent. All rights reserved.
Tax

The start of Tax Season 2023: By the numbers

ByDaniel Hood
February 27, 2023 3:11 PM

By now the word has, hopefully, gotten out to clients: Refunds are smaller this year, thanks to reductions in various COVID-related relief programs.

But in terms of broad process, the season may be running a little ahead of last year, with more returns filed and processed, and more refunds issued, than at the same time in 2022. What's more, the number of professionally prepared returns is up as well.

And in case you're wondering why your clients haven't shown up yet, you might want to make sure you're not in one of the worst cities for tax procrastination ... .

AT-022723-Tax Season Chart - Average Tax Refund
If anything, the gap between last year's average individual refund and this year's is growing, from $238 in the first week of tax season to $396 as of Feb. 17, the most recent data for which IRS data is available.
AT-022723-Tax Season Chart - Number of refunds issued
But while the refund itself may be smaller, the IRS has actually issued significantly more refunds — almost 6 million more as of mid-February compared to the prior-year period.
AT-022723-Tax Season Chart - Total amount refunded
In keeping with the larger overall number of refunds issued, the total amount of money issued is also up over last year.
AT-022723-Tax Season Chart - Total returns YOY
Overall, the season started with a bang, with over 2 million more returns received in the first week of this tax season than in the first week of the 2022 season. The gap has slowly been closing, though, and was down to less than 1 million by mid-February.
AT-022723-Tax Season Chart - Total tax returns so far
By mid-February, the IRS had processed almost all the returns it had received thus far in the season, hopefully indicating that there won't be much of a backlog in returns this year.
AT-022723-Tax Season Chart - DIY versus tax pros
The percentage of early returns prepared by tax professionals is up from last year. The number of self-prepared returns remained roughly the same by mid-February — 20.69 million this year versus 20.73 million in 2022 — the number of professionally prepared returns was up by over a million, at 15.38 million versus 14.21 million last year.
AT-022723-Tax Season Chart - Visits to IRS website
With fewer relief programs and tax credits to keep track of — and the postponement of a 1099-K requirement that would have been enormously burdensome — this year's tax season is shaping up to be less complex
AT-022723- Tax Season Chart - Worst cities for procrastination
In case you want to start planning for the last few weeks of tax season, ChamberofCommerce,org has put together a list of the cities with the most procrastinators, based the number of people searching for information on filing their taxes late. If you're in one of the cities listed above, don't be surprised if you get a flood of late calls — and don't get too comfortable in Minneapolis, Denver, Cincinnati, Seattle, or Richmond, Virginia, either, as they're the next five on the list.
Daniel Hood
Editor-in-chief, Accounting Today
Tax Tax season Tax returns Tax refunds Tax preparers
MORE FROM ACCOUNTING TODAY