It is predicted that Americans may receive a bit more money in their tax returns this year. A financial expert has stated that inflation rates may mean some families nationwide will receive extra money.
According to Mark Steber, Chief Tax Information Officer at Jackson Hewitt, anyone whose income did not outpace inflation should do better this year. He predicted an increase of about $300 to $400 in refunds for many filers, which is about a 10% increase compared to last year.
Tax Expert Explains How Americans Could See $300-$400 More on Their Returns – No Voodoo or Marketing Spin Involved (Photo from: NPR)
The IRS adjusts the federal tax income bracket and standard deduction every year, and when inflation is high, the bracket increases. Inflation rates were high this year, so the bracket increased by about 7.1%. This increase is intended to protect taxpayers from “bracket creep,” which occurs when certain taxpayers are pushed into a higher income bracket but still have the same purchasing power due to price increases.
This protection is crucial for taxpayers who could have made more money and outpace inflation. Without this adjustment, they would have even less money and pay more taxes. Lower to moderate-income families could benefit from the expected 10% increase, as there was little good news for them with rising inflation last year.
Taxpayers should ensure that their returns are accurate and filed out entirely, and it is recommended that they file their taxes electronically to receive their refund within 21 days. However, some filings may require additional review due to errors, suspected theft, or fraud.
It is important to note that the deadline for most taxpayers to submit their filing is April 15, 2024. Anyone needing help with filing should seek the assistance of an expert.
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