The latest IRS filing data reveals a 11.1% increase in average tax refunds compared to the same period in 2025, with individual filers receiving an average refund of $3,462 as of April 3. This surge in refunds can be attributed to the 2025 changes enacted by President Donald Trump's 'big beautiful bill', which introduced new deductions for tip income, overtime earnings, seniors, and auto loan interest. However, rising gasoline prices amid the Iran war threaten to offset this windfall, as many Americans struggle with elevated costs of gas, electricity, food, and other living expenses. The CNBC and SurveyMonkey Quarterly Money Survey further highlights that nearly one-quarter of filers will use their refunds to pay down credit card debt or save the payment. Despite Trump's legislative changes, the average refund size pattern aligns with previous years, with the biggest payments reported in late February and refund amounts gradually declining before Tax Day. The White House initially projected an extra $1,000 or more in refunds, but IRS data shows smaller year-over-year payments of around $350. This discrepancy could be due to early filers with tip or overtime income, who were incentivized to file in January or February, potentially anticipating larger refunds. If this trend persists, the average refund size could decrease by April 15. Alternatively, last-minute filers claiming the federal deduction limit for state and local taxes (SALT) could still lift average payments. As the filing season progresses, the average tax refund may still change with two more IRS updates before the April 15 deadline.
