Now that the official tax filing deadline (April 18) has passed, many of us can expect to receive our returns, if it hasn’t been received already. The IRS has already issued more than 70 million refunds, at an average of $3,256. According to CNBC, that’s over $400 more than last year, when the average refund was just above $2,800.
This, for many, is the largest check they’ll receive all year, so it’s important to figure out how to best spend the extra cash. With rising inflation costs, many Americans have accumulated extra debt, and are struggling to keep up. That’s why, it makes sense to have a plan for spending the extra money wisely.
Estimate your refund so you can make a plan for that money.
“There are many free calculators online to help you estimate your refund. Once you have a sense of how much you’ll get back, you can make a plan for how you’ll put that money to work.”
Look for ways to get your refund faster.
“The IRS recommends taxpayers file their taxes online and request their refund via direct deposit. There are tons of DIY tax filing tools online, some even offer faster access to your refund. For example, if you file your taxes with TurboTax within the Credit Karma App and choose to have your refund deposited into a Credit Karma Money account, you may be eligible to file your taxes for free and you may be able to receive your deposit faster, in some cases within an hour of your return being accepted by the IRS.”
Make a plan for your refund.
“If you expect to get a refund this year, it’s important to have a plan in place before you get the refund for how you’re going to use that money. Once you know how much your refund will be, make a plan for how to best utilize that money so you don’t spend it on something you don’t need. If you can, consider putting your refund toward paying down debt or building savings. It’s especially important to prioritize your savings given a Credit Karma survey found that 38% of Americans say the amount of money they have in savings has decreased since the start of the pandemic.”