The American Tax & Financial Center at TurboTax released its latest research report on the impact of tax refunds for the average American household. Highlights from the report include:
- An estimated $230 billion in federal tax returns will be issued this year to American taxpayers, fueling the U.S. economy and marking one of the biggest paydays of the year for the average U.S. family.
- Approximately 40% of taxpayers live paycheck-to-paycheck. The average refund in 2012 was $2,700 and equals more than a months’ worth of income for two-thirds of taxpayers or more than three months’ worth of groceries for a family of four.
- Where are tax refunds spent? With an average of $854 spent during the holidays and an average consumer credit card debt of $8,721, income tax refunds are a big source of funds to meet debt obligations. The average tax refund could cut almost a third of the average credit card debt.
How Tax Refunds Are Spent
- Only 25% of tax payers will save at least some of their tax refund.
- Approximately 84% of taxpayers that file on the earlier side (before Feb 15th) receive a refund, compared to just half of those filing in April.
When can I expect my tax refund? In most cases if you e-file (see recommended providers) and use direct deposit the IRS estimates that you should receive your federal refund between 8 and 14 days after they accept your return (i.e. the IRS does not send you a notification requesting additional information or an audit notice). If you did not select the electronic deposit option, getting a paper check mailed to you adds about a week.
If your return was filed by mail, then your refund can take up to 6 weeks from the date the IRS receives a complete and accurate return. Once your return is accepted by the IRS, the IRS processes your refund based on the IRS E-file Refund Cycle Chart. Exact refund dates are based on IRS processing times and can be found in IRS Publication 2043 and IRS Topic 152 for both e-filed and mailed returns. [See more tax filing dates here]
{ 3 comments… read them below or add one }
Is the date the IRS gives you for receieving your refund the actual day you will get it? Can you get it earlier?
It is a gudieline, but normally pretty accurate. It may differ by a day here or there depending on your bank and funds clearing process. Normally you cannot request it earlier – just file sooner rather than later.
With CD and savings account rates at their current low levels, it is less foolish than it used to be to let the IRS force you to save by having too much withholding. It is better than not saving anything.