IRS starts processing 2023 tax returns: Here's how to find out more about your refund

Many people woke up Monday morning far more focused on who will play in the Super Bowl on Feb. 11 than thinking about doing their income taxes, but the IRS kicked off the 2024 tax season nonetheless on Monday.

The IRS began accepting and processing returns Monday for early filers who are ready to go. The deadline for federal and Michigan returns remains a few months off on April 15.

The IRS expects more than 146 million individual tax returns for 2023 to be filed by the April 15deadline.

Who files a tax return early?

Early filers tend to have a laser focus on getting their hands on their tax refund cash.

"For many people, this will be the biggest check they see all year," said IRS Commissioner Danny Werfel in a call with the media.

The average federal income tax refund in 2023 was $3,167 based on IRS data through Dec. 29, down 2.6% from the same period in 2022.

The IRS issued a total of $334.8 billion in income tax refunds through Dec. 29, down 6.9% from the same period in 2022. The total number of refunds was down 4.4%.

The IRS issues most refunds in less than 21 days, especially when the return is filed electronically, and the refund is to be made via direct deposit into a bank account. Some refunds arrive even earlier than that. But the IRS cautions taxpayers not to rely on receiving a refund by a set date, especially when making major purchases or paying bills.

Some returns require additional review and take longer.

Taxpayers claiming the earned income tax credit or the additional child tax credit on their federal returns aren’t able to get a refund before mid-February by law. The IRS must delay issuing those refunds in order to avoid fraudulent claims early in the season.

Early filers can expect to see most refunds related to the earned income tax credit or the additional child tax credit to be in bank accounts or on debit cards by Feb. 27 under key conditions. The Feb. 27 date depends on whether the tax filer electronically files the tax return, chooses direct deposit, and the IRS has no other issues with the return, the IRS said.

How to track your refund

Not surprisingly, the hot spot at IRS.gov is the "Where's My Refund?" tool.

In 2022, some 54 million taxpayers, or roughly 16% of the U.S. population, according to Laurel Blatchford, Treasury’s chief implementation officer for the Inflation Reduction Act, used the tool.

The tool is in high demand but also has received criticism in the past for being unable to answer or provide useful information for taxpayers whose returns were caught up in processing delays.

More dollars have been spent on improving the "Where's My Refund?" tool and other IRS operations with the money provided after Congress passed the Inflation Reduction Act.

You can check your federal income refund status 24 hours after you e-file a current-year return. You need your Social Security or individual taxpayer ID number, your filing status and the exact refund amount on your return.

You'd use the "Where's My Amended Return?" to check the status of an amended tax return.

The IRS said new ongoing updates will allow taxpayers to see more detailed information about their refund status.

This year, Werfel said the "Where's My Refund?" tool will give taxpayers an alert about whether the IRS is waiting for a letter or other information from the taxpayer before the refund can be issued.

"In previous years," he said, "they were able to see whether it was in process or imminently going to be issued. But they did not have line of sight onto whether there was an action they needed to take in order to complete the process and get their refund."

Werfel called the change "really important" because it gives more clarity to taxpayers who are waiting for refunds. These taxpayers also wouldn't have to go to the IRS 800 number for answers.

The IRS said the messages on the "Where's My Refund?" tool will be written to be easily understood. The tool is expected to work seamlessly on mobile devices. Without such changes, taxpayers often see a generic message stating that their returns are still being processed and told to check back later. But the IRS said the improvements will offer more detailed updates.

The IRS said it will continue to expand the information available on "Where’s My Refund?" " later this year, too.

When does tax season start?

If you don't have all your paperwork in order, you do not want to rush to file a tax return.

"Taxpayers should file when they are ready to file," Werfel said. "As soon as they believe they have a complete and accurate return, they should file."

Employers are required to mail wage statements for 2023 — the W-2 and 1099 — to their employees by Jan. 31. You want that document.

Tax experts warn that filing a tax return based on your pay stub from the end of the year isn't wise because the end-of-year stub typically doesn't reflect all taxable income received for a calendar year.

If you're in a rush, it's OK to get other paperwork ready and double check your numbers when you get that W-2. Some employers do give online access to your W-2.

This year, a tax deal remains before Congress that could make some key changes in the law that would apply retroactively to 2023, including a possible expansion of the child tax credit for lower income families.

The proposed changes for the credit would boost benefits for 16 million children — or more than 1 in 5 of the nation’s 72 million children — in the first year of the expansion of the credit in 2023.

Half of the roughly 16 million children nationwide who would benefit under the proposal in the first year live in families who would gain $630 or more through the expanded credit, according to the Center on Budget and Policy Priorities, a nonpartisan institute based in Washington, D.C., that analyzes state budget and taxing policies.

If the change is retroactive to 2023, the IRS is expected to adjust payments or refunds for those who filed early but are owed more money for the child tax credit due to the tax law change.

"Even if you already file, we will make the changes here and make sure that you get the payment that you're eligible for," Werfel said in a media call.

"Don't wait on Congress."

Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X (Twitter) @tompor.

This article originally appeared on Detroit Free Press: IRS accepting tax returns Jan. 29: What to know about tax refund