Could Michigan Residents Get a Larger Tax Refund This Year?

2025 might go down as one of the strangest tax years in history. Will this pay off in larger tax refunds for Michiganders?

Why is this tax year different?

DOGE plans to fire tens of thousands of IRS employees.
Fewer tax returns have been filed so far this year.
On average, tax refunds have increased so far this year.

The IRS released encouraging data about tax refunds according to the Detroit Free Press,

The average federal income tax refund was $3,453 during this first four weeks through Feb. 21, according to the latest IRS data. That's up 7.5% from last year's tax season average of $3,213 through Feb. 23, 2024.

That does seem like good news. However, proposed cuts to the IRS could throw a monkey wrench into the system for those who haven't filed yet.

Around 7,000 IRS employees were laid off by DOGE in February. PBS reports that DOGE is planning on firing half of the 90,000 people currently working for the IRS, sending the agency into complete chaos and dysfunction.

Why would tax refunds be higher than average this year?

This leaves us with the big question: Why? Believe it or not, Investopedia says it's likely connected to inflation,

Strong inflation led to more generous tax code adjustments in 2024, and slowed wage growth could mean more households had overwithheld and will receive bigger refunds.

Important takeaway: File your taxes as soon as you can. Once these IRS cuts take place, things will likely move at a record slow pace.

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