WITH tax season approaching, Americans may be surprised to find their tax refunds higher than normal this year.
Analysis shows that dollar amounts for tax refunds could be at their highest in years.
GettyAmericans who received little to no pay increase or didn’t withhold enough will see more money in their refunds this year[/caption]A report published by Oxford Economics shows that total tax refunds are in line with those of the past five years.
However, the amount of money being refunded is higher than usual.
Due to the IRS’s significant increases in annual tax bracket adjustments, many Americans may have over-withheld in 2024, according to Oxford Economics Lead US Economist Bernard Yaros.
“Last year, annual tax-code adjustments were more generous than usual as wage growth slowed,” Yaros said in the report.
Those who received little to no pay increase last year may have a higher tax refund this year.
Moreover, those who didn’t withhold enough may end up owing slightly less than anticipated.
Americans who earn less income could see a considerable benefit in addition to refunds from income or child tax credits.
In 2022, the American Rescue plan offered more tax credits for eligible filers.
The American Rescue Plan boosted refunds to their highest levels in years.
In 2025, the average tax refund comes out to $2,169.
According to Oxford Economics, that number will increase over the coming days.
Tax season is typically a lucrative time for retail businesses, as Americans spend more when their checks arrive, driving sales.
“Historically, February is the most important month for refunds,” said Yaros.
“A larger refund issuance relative to prior years correlates with stronger retail sales during that month.”
How Americans spend their IRS tax refunds
Americans allocate money from their tax returns on the following:
Used Cars: 3.6%
Shoe stores: 3.2%
Hobby, toy or game stores: 2.9%
Discount department stores: 2.1%
Warehouse clubs or super stores: 2%
Clothing stores: 1.2%
Source: Oxford Economics
Higher tax returns benefit low- to moderate-income Americans the most.
This explains the rise in used car sales and discount or warehouse club sales.
However, Yaros explains that not all Americans spend their refunds.
According to Yaros, credit card delinquency rates fall as tax filers pay off their bills and debt.
‘WELL KEPT SECRET’
The IRS is informing tax filers about a little-known tax break that could save Americans thousands during tax season.
The saver’s credit is a well-kept secret, with only 5.8% of eligible filers taking advantage of it.
The saver’s credit mostly benefits low- and moderate-income Americans, and can save you up to $1,000 per filer.
It’s not too late to take advantage either – tax filers can still make IRA deposits to qualify and claim the credit until April 15.
Read More Details
Finally We wish PressBee provided you with enough information of ( Americans to get highest tax refunds in years – and little-known tool will help get yours quicker )
Also on site :