Bigger Inflations Means Smaller Returns
According to the most recent data from the IRS, the average refund reported so far is $2,910, which is down from the previous $3,226; roughly down 10%. Further, the overall amount refunded is down to $183.130B from $204.405B from last year. The average refund shrinking is partially due to many of the pandemic relief programs expiring; the child tax credit has gone back to $2,000 per child whereas it was as high as $3,600 previously. Covid-era supplemental SNAP food program benefits also expired in February. CBS News. As inflation continues to be on the rise, that means your returns will not go as far as they did last year.
Many families rely on tax season in order to be able to take care of their families and not have to take on any side jobs to make ends meet. As groceries, rent, and gas prices continue to rise, it has many worrying about how they will be able to pay all their bills. Accountant Drew Poulos who was interviewed by CBS News states that many should look into planning for next year’s taxes now. “Planning for contributions for health savings, planning for contributions to a retirement account, planning for contributions to a college savings fund,” he further discussed. CBS News. Planning ahead and adjusting your incomes now have the potential to help next year as inflation and the slowing economy continue.
For more information on your taxes and what you can do to get the most out of your return, please reach out to the Professionals at The Center for Financial, Legal, & Tax Planning Inc., at (618) 997-3436.