IRS has been providing tax refunds for the past month; more than 22 million taxpayers will receive the tax refunds by February 18. The average tax refund for this year is around $3,500. The reports suggest that the taxpayers receive $700 extra compared to the last year. Grow acorns reports a 33% increase in the average tax refund. However, around 29% of the filers are concerned about a lower tax refund. Last year, millions of families received the Child Tax Credit; the IRS will issue the remaining CTC payments this year.
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Taxpayers have witnessed frequent changes recently
Grow Acorns quoted Ted Rossman, senior analyst at Bankrate and CreditCards.com, who said, “Inflation is the big elephant in the room that is starting to weigh on people. The past nine months, it’s probably been more psychological, but I think we’re starting to see it more in the data. The tax refund used to be this once-a-year windfall, but there have been a bunch of windfalls as of late. There have been a lot of money drops over the past few years, so maybe people have gotten a little bit accustomed to it. People are going to continue to draw down their savings. They’re going to continue to raise their debt levels. “
The majority of taxpayers are unaffected
The inflation level is a record high; it has broken the records of the previous four decades. The essential commodities have witnessed a price rise; this has toughened the survival of low-income families. The debt-ridden Americans are desperate for refunds to pay off their expensive bills. Reports show that nearly 36% of the taxpayers consider tax refunds an essential component of their finances. Millions of families have received thousands in tax refunds during the last six years.
Grow acorns reports that the pandemic period saw an increase in the personal savings rate, the credit cards debts declined significantly. The reports state that the individual savings rate has retained normalcy. However, credit card debts have spiked in the first half of 2022. The continuous increase in Inflation will make matters worse for the indebted taxpayers; they need to clear their debts as soon as possible.
