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Despite falling inflation, many Americans are still struggling financially and will need their annual tax refund to help cover the basics.
Overall, about 30% of Americans say they would count on their tax refund to cover their needs. a survey released Wednesday by Credit Karma, which polled nearly 1,000 US adults in early December. The percentages were even higher for Gen Zers and Millennials, of whom 40% and 46%, respectively, say they would rely on pay.
“Nearly three-quarters of Americans are expecting a tax refund this year and for many this will be their most significant financial crunch of the year,” said Courtney Aleve, consumer financial advocate at Credit Karma.
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While many Americans count on the annual tax refund, financial hardships could be more severe this season after a year of rising costs.
Annual inflation dropped to 6.5% In December, the US Bureau of Labor Statistics announced on Thursday. While prices are falling, annual inflation remains at the highest level in decades.
Meanwhile, the IRS has warned taxpayers that Refunds may be less in 2023 Now that many pandemic-era tax breaks, such as the larger child tax credit or the more generous charitable deduction, have expired. In 2022, the average refund as of October 28 was $3,176 their’sUp nearly 14% from 2021’s $2,791.
how to get tax refund faster
If you’re banking on getting a tax refund, financial experts say there are a few ways to avoid issues that delay the process.
John Loyd, a certified financial planner and owner of The Wealth Planner in Fort Worth, Texas, urges taxpayers to file returns electronically. “There’s a saying in the tax world,” he said. “Anytime you mail something to the IRS, you want to assume that it’s going to be lost.”
While the agency typically issues tax refunds within 21 days, paper-filed returns can take longer to process. “Taxpayers should prepare to file electronically and choose direct deposit for their tax refunds,” the IRS said. in a news release,
Loyd said errors on tax returns are another reason for delays in processing. incorrect personal information, such as your social security number or mismatched data from tax formsResolving may take additional time.
tax season Opens January 23 for individual filersThe IRS made the announcement on Thursday.