A recent survey shows that the number one reason Americans put off paying their taxes is because they find the process too complicated or stressful. (iStock)
One in four Americans doesn’t feel ready to pay taxes this year, and 29% admit to putting off paying taxes, according to a recent survey.
For the second year in a row, Wyoming ranks as the state with the greatest procrastination problem, according to IPX 1031. investigation. Baltimore, Maryland, topped the list as the city with the most people putting off filing their taxes until the last minute.
Additionally, 28% of Americans don’t know when their taxes are due this year. 1 out of 5 people answered that the deadline was April 18th. So this year’s tax day is April 15th. Most Americans who are delaying filing say they plan to file in February or March, but 19% plan to file in April or later, and an additional 8% plan to file for an extension. ing.
Here are the top five reasons why Americans procrastinate paying their taxes.
- Too complicated/too stressful
- It takes too long
- make sure it’s correct
- I’m worried that I owe money
- I knew I wouldn’t get a refund.
“Americans saw their tax refunds decline last year as many pandemic policies expired and tax credits returned to historical levels,” said Michael Wallace, CEO of Greenback Tax Services. said. “This year’s tax refund is expected to be higher than last year, but not by a significant amount.”
If you expect your refund to be smaller this tax season and are struggling to pay off your debts, you may want to consider consolidating your debts with a personal loan. Credible can help you find an interest rate that’s right for you without affecting your credit score.
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The average refund amounts for 2024 are as follows:
The average tax refund Americans expect this year is $2,552, lower than the average refund of about $2,900 in 2023, according to the survey. Approximately 30% of taxpayers said they expected their refund to be smaller than in 2023, 21% said they expected a larger refund, and 49% expected the same amount. I answered yes.
Many Americans plan to save money for their repayments, but others will pay down debt, invest, buy groceries, or use the unexpected cash to pay rent or mortgage.
“For many Americans, this is one of the biggest injections of cash flow all year,” said Joe Berman, senior financial planning consultant at eMoney Advisors. “With credit card usage increasing and emergency fund balances plummeting, it may be wise to use at least a portion of your refund to reduce consumer debt or build up emergency savings. do not have.”
If you’re having trouble paying off your debt, you can consider taking out a personal loan to consolidate your payments at a lower interest rate and save money each month. Visit Credible to find the interest rate that’s right for you without affecting your credit score.
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How to reduce your tax burden
Buermann said Americans who find they owe more taxes or get a smaller refund can make changes to lower their taxable income in 2023.
For example, deducting IRA contributions of up to $6,500 if you’re under 50 and $7,500 if you’re over 50 is one way to reduce your debt. These contributions are not taxed until they are withdrawn from your account. The last day you can contribute to an IRA in 2023 is the April 2024 tax filing deadline.
In addition, taxpayers covered by a high-deductible health plan (HDHP) who do not take full advantage of the individual $3,850 or Health Savings Account (HSA) $7,750 contribution limits will have to reduce their 2023 contributions. There’s still time to make the most of it. .
“These accounts can offer a triple tax advantage: contributions are tax-deductible, growth of funds is tax-deferred, and distributions of qualified distributions are tax-free.” said Buermann.
If you’re eligible for a small refund this tax season, but still have debts to repay, why not consider consolidating them with a personal loan? Visit Credible to find an interest rate that’s right for you without affecting your credit score.
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