The top reason Americans put off doing taxes is because they find the process too complicated or stressful, a recent survey said. (iStock)
One in four Americans don’t feel prepared to file their taxes this year, and 29% admit to procrastinating, a recent survey said.
Wyoming topped the list as the state with the biggest procrastination problem for the second year running, according to the IPX 1031 survey. Baltimore, Maryland, took the top spot as the city with the most people putting off filing taxes until the last minute.
Moreover, 28% of Americans don’t know when taxes are due this year. One in 5 said that the deadline was April 18 — tax day is April 15 this year. Most Americans delaying filing said they planned to submit their taxes in February or March, while 19% planned to file in April or later — additionally, 8% plan on filing for an extension.
The top 5 reasons Americans cited for putting off doing their taxes were:
- Too complicated/stressful
- Too time consuming
- Making sure it is correct
- Worried they would owe money
- Knew they were not getting a refund
“Last year, Americans saw a drop in their tax refunds after numerous pandemic policies expired and tax credits returned to past levels,” Greenback Tax Services CEO Michael Wallace said. “This year, tax refunds are expected to be higher than last year, but not by much.”
If you expect a smaller refund this tax season and are struggling to pay down debt, you could consider consolidating it with a personal loan. Credible can help you find your personalized interest rate without affecting your credit score.
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Here’s how big the average refund will be in 2024
The average tax refund Americans expect this year is $2,552, less than the roughly $2,900 average refund amount in 2023, according to the survey. Roughly 30% of tax filers said they expected to receive a smaller refund compared to 2023, 21% stated they were counting on a bigger one, while 49% anticipated the same amount.
Many Americans plan to save their refunds, while others said they would pay off debt, invest, buy groceries, or pay their rent/mortgage with the cash windfall.
“For many Americans, this is one of the largest infusions to their cash flow during the course of the year,” eMoney Advisor Senior Financial Planning Consultant Joe Buhrmann said. “With credit card usage on the rise and emergency fund balances in freefall, it might be prudent to allocate at least a portion of your refund to reducing consumer debt and/or building up emergency savings.”
If you are struggling to pay off debt, you could consider using a personal loan to consolidate your payments at a lower interest rate, saving you money each month. Visit Credible to find your personalized interest rate without affecting your credit score.
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Ways to lower your tax burden
Americans who find they may owe a tax bill or will get a smaller refund can still make changes to lower their taxable income for 2023, according to Buhrmann.
For example, making a deductible IRA contribution – up to $6,500 for those under 50 and $7,500 for those aged 50 and over – is one way to lower your debt. Taxes won’t be due on those contributions until they are withdrawn from the account. The last day to contribute to an IRA for 2023 is the tax filing deadline in April 2024.
Additionally, tax filers covered by a high-deductible healthcare plan (HDHP) that didn’t fully take advantage of the $3,850 for individual-only or $7,750 contribution limits for a Health Savings Account (HSA) still have time to max out their 2023 contributions.
“These accounts can offer a triple-tax advantage, where contributions are tax-deductible, funds grow tax-deferred, and distributions for qualified distributions are tax-free,” Buhrmann said.
If you think you will receive a smaller refund this tax season but have debt you need to pay down, you could consider consolidating it with a personal loan. You can visit Credible to find your personalized interest rate without affecting your credit score.
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