There seems to be a lot of news coming out of Washington today, and we can add this bit to the list. The IRS has found that Americans are getting back 10% more money in their tax refunds this year compared to last.
USA Today reports that the average tax refund through March 12 was $3,036, compared to $2,770 the previous year. Of course, nearly half of all American households have yet to file their taxes, but the numbers are still a good picture of what many Americans can expect this year.
The better-than-average returns are primarily due to the American Recovery and Reinvestment Act passed last year. According to USA Today, “The Recovery Act provided a tax credit of $400 for workers, or $800 for married couples. Most workers who have taxes withheld from their paychecks received the credit through an adjustment in their withholding. But those who didn't receive the full credit through withholding will receive the balance in their refunds.”
On top of this, many Americans profited from tax credits through the Recovery Act on college expenses, buying their first home and a tax break on unemployment benefits.
But there is one downside. USA Today reports that the tax credits have “created confusion” for many, and millions of Americans so far have made errors on their returns when filing for some of these new credits.
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