Every January, American taxpayers look forward to tax season with one of two feelings: horror or happiness.Horror, of course, applies to those expecting to owe Uncle Sam a chunk of change. And then there are the happy households that will divvy up the estimated $230 billion the IRS will issue in refunds this year.
Federal tax refunds are the single largest lump sum of money average Americans receive in a year, according to TurboTax’s American Tax & Financial centre—an average of $2,700 per household.
That’s nothing to sniff at, and for most families, it’s like getting two bonus paychecks in the mail. The vast majority plan on setting the cash aside to pay down debt (42 per cent), followed by savings (25 per cent) and creature comforts (16 per cent) like vacations and shopping.
Though filing early doesn’t necessarily better your odds of getting a refund, history has shown about 84 per cent of taxpayers who file by Feb. 15 take home a refund, compared to half those who file in April, according to the ATFC.
Of course, that probably has more to do with eagerness than anything else. People who estimate they’ll get a return will be far more likely to file early, and people expecting to owe money to the IRS are likely to drag their feet ’til the tax deadline.