Tax filing season is upon us, and Americans eagerly await their refunds. The IRS got an early start on processing taxes in 2022. This year’s tax season began on Jan. 24 as opposed to Feb. 12 of last year. The deadline to file taxes this year is April 18, and so far, the average refund has been higher than last year’s. The IRS reports that as of March 25, the average refund was $3,263, up from $2,902 in 2021.
Kiplinger.com notes in an article that people expecting large refunds tend to file early, so the average amount may be lower when all filings are processed. On the other hand, other factors could yet increase average refunds. For example, most taxpayers could get a boost if they did not receive their Economic Impact Payment of $1,400 or did not take advantage of the expanded child tax credit in 2021. (Here are some common tax mistakes people make.)
Other factors that could affect the tax refund are state-dependent. To determine the states with the largest average tax refund, 24/7 Wall St. reviewed data on tax filings and refunds from the Internal Revenue Service. States were ranked based on the average income tax refund amount issued per individual income tax filing in the 2020 fiscal year.
The good news is that in all states except Oregon the average federal income tax refund exceeded $2,000 in the 2020 fiscal year. Texans scored the highest amount at $2,682.
So what will Americans do with their hefty check? In February, the National Retail Federation surveyed 7,929 adults about what they planned to do with their refund. Most said they will use the funds wisely, with 51% targeting the dollars for savings. Thirty-three percent plan to pay down debt. (Here’s what Americans spend their money on.)
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