Find out how a large tax refund is essentially giving the government a loan without interest.
Large Tax Refund Received By Some Americans
Experts say that Americans who receive large tax refunds from the IRS would be better off getting a smaller refund.
Although many people love receiving a large tax refund from the IRS, it could mean that they have been withholding too much money.
This money may come from their paychecks throughout the year, essentially giving the government an interest-free loan through their large tax refund.
In today’s era of high household debt, experts recommend that instead of settling with a large tax refund, adjusting tax withholdings to put that extra money toward paying off debts is a lot better.
According to a published article by SmartNews, earning interest in a savings account is also a good option instead of receiving a large tax refund each year.
To do so and be better off receiving smaller amounts rather than a large tax refund, withholding can be changed at any time by submitting a W-4 form to your employer. Experts also suggest doing so as early in the year as possible.
IRS’s Promise Of A Better Service To Taxpayers
In a published article by CBS News, the IRS has started accepting tax returns for the 2024 tax season, promising better service for taxpayers.
Many Americans plan to file early to receive their tax refund as soon as possible, with the average refund check being around $3,200 last year.
The timing of the tax refund is a concern for many, as IRS backlogs caused delays during the pandemic.