The average federal income tax refund was $2,869 in 2019 based on returns filed through Dec. 27, 2019.
Nearly 40% of tax filers do so before the end of February…presumably because they want their refund or need it.
A tax refund is a great opportunity start saving, to invest. Open an account in an indexed mutual fund and reinvest all the earnings. Set it and forget it (except for sending in a few more bucks whenever you can) and watch it add to your financial security.
But if that refund is really large, you are just making a tax-free loan to the government. Lower your withholding a bit and put the difference in a mutual fund throughout the year.
Dick, what’s interesting, is that the dollar amount of the average has been $2,700+ for each of the past 7 years. Now, averages can be deceiving, but seven years in a row (or more, perhaps), surely looks like a pattern of behavior for tens of millions of filers each year!
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I funded my wife’s Roth IRA depositing the refund checks. Since I worked a lot of overtime, I couldn’t estimated my taxes very well because I could predicate the number of hours I would work in the future. But I knew exactly what I was going to do with the overpayment.
Now that I am retired, I have it down to me owing the government <$100 per year because my income is very predictable.
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Please stop with the common sense…you’re offending the masses !!
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