Most economists agree that the way to get the economy moving is to get money into the hands of those most likely to spend it. That's why recent stimulus packages have included adjustments and tax credits meant to lower tax bills and, in some instances, boost tax refunds. It's apparently working: The Internal Revenue Service has announced that it expects to issue between $250 billion and $300 billion in tax refunds this year.If you're assuming that most of these refunds will be insignificant, you're mistaken. IRS Commissioner Doug Shulman advised Congress that the average federal tax refund this year will be approximately $3,000.
So far, the IRS has received about 75 million federal income tax returns with about 65 million qualifying for refunds. If those numbers seem a little high on the refund side, they are. Statistically, taxpayers expecting to receive a tax refund file early in the season; those taxpayers expecting to pay a tax bill tend to put it off as much as possible.
For those who haven't yet filed, the IRS encourages taxpayers to take advantages of available help. You don't want to miss out on available credits and deductions, which can reduce your tax bill or increase your tax refund.
If you're expecting a refund and want to get it quickly, don't assume that you'll have to pay to do it. You can file your tax return electronically and have a check mailed to you, purchase federal savings bonds with your refund or have your refund direct deposited into your bank account. With the combination of e-filing and direct deposit, you can expect to see your refund in about eight to 10 business days.
Of course, you don't have to file early, even if you're expecting a refund. Remember, you have a few extra days to file this year: Tax Day is April 18.
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