Expert: Plan ahead to avoid tax refund
IRS: Typical tax refund for 2024 was $3,176
(InvestigateTV) — WalletHub found that 49% of Americans need a tax refund this year to help them pay bills – a worrisome statistic, according to WalletHub’s John Kiernan.
Kiernan advised people to view their refund as a nice surprise.
“Maybe something you use to boost your savings and emergency funds,” Kiernan said. “Or maybe to take a vacation without having to go into debt, which a lot of people kind of use to take a vacation. It shouldn’t be something that you must have.”
He explained that receiving a tax refund often means you’ve overpaid your taxes throughout the year—essentially giving the government an interest-free loan.
He added that if you need that money now, it may be wise to adjust your withholdings to receive more in each paycheck rather than waiting for a large refund.
For those who owe taxes instead of receiving a refund, the focus shifts to a different set of priorities.
“The biggest piece of advice I have is to file no matter what,” Kiernan said. “A lot of people think if they don’t have enough money to pay their complete tax bill they should just wait, that’s a big mistake. Because the IRS charges two different fees around filing without a payment and not filing at all.”
He said the penalty for failing to file is significantly higher than the fee for not paying the full amount by Tax Day.
Your options for filing, even if you can’t pay right away, depend on how much time you need—whether it’s an extra 30 days or up to six months to pay.
For those living in FEMA-designated disaster areas—like parts of North Carolina affected by Hurricane Helene or Californians impacted by wildfires—the federal tax deadline has been extended until October.
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