Your Tax Refund Was Bigger This Year. Here's Why That Might Be a Problem.

0If you got a bigger refund this year, congratulations. But before you celebrate, ask yourself: why?

The IRS just dropped the numbers. The average tax refund as of April 10 came in at $3,397 — up 11.2% from $3,055 last year. More people are getting money back. Fewer people owe.

Sounds good. Except it isn't, really.

Here's the deal: a big refund means you overpaid all year. You gave the IRS thousands of dollars in interest-free loans while inflation ate away at your purchasing power. That's not a win. That's a budgeting fail.

So what's driving the increase?

A few things. Withholding tables didn't fully catch up with 2026 tax changes. Some people adjusted their W-4s after the One Big Beautiful Bill passed. Others just guessed and hoped for the best.

If you got a windfall refund, call your CPA. Adjust your withholdings now for the rest of 2026. You can do it mid-year — the IRS has a withholding calculator that takes about 10 minutes.

And if you owed money this year? Same advice applies. Increase your withholdings. It's the easiest way to avoid a surprise bill next April.

Couldn't pay by April 15? Here's what you need to know.

You can file an extension using Form 4868. That gives you until October 15 to get your return in. But listen carefully: an extension to file is NOT an extension to pay. The money you owed was still due April 15. Interest started accruing the next day, and penalties can stack on top.

Your Tax Refund Was Bigger This Year. Here’s Why That’s a Problem for CPAs

The worst thing you can do? Nothing. The IRS is significantly more reasonable when you reach out first.