2004 Tax Refunds Higher

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The Internal Revenue Service is reporting that the average federal tax return refund has increased $206 from the previous year for those filing their taxes early. The average refund this year came to $2,436 for tax returns filed up until last Friday. This is a 9% increase from last year when the the average was $2,230 for early filers.

In addition to the increase in refund amounts, the IRS is also reporting an increase in the number of tax returns filed electronically, with increasing growth among individuals who use tax software to file their tax return from home. It is estimated that for the first time ever, more than half of all tax returns will be filed electronically this year.




Tax returns that are filed usually receive a larger refund amount than the average refund for all tax returns filed. This is because those individuals expecting a large return usually want to get their refund as quickly as possible while those who have to pay tax or will receive a small refund usually delay filing. Electronic filing is helping tax payers to get their returns even quicker.

While large refunds are a nice surprise, they are also a free loan to the government since that money is yours. The large refund indicates a taxpayer has overpaid throughout the previous year. Many financial experts say that if your refund is consistently large, adjusting you withholdings will allow you to keep more money every week.