Half of Americans expect lower tax refunds this year, survey says

Just 42% of survey respondents said they anticipated a refund in 2022

With tax season upon us, many Americans said they are expecting lower refunds this year, according to a recent survey.  (iStock)

As the April 18th tax deadline approaches, many Americans said they're expecting smaller tax refunds in 2022, while some questioned whether they’ll get a refund at all, according to a new survey from Forbes Advisor.

More than 50% of Americans surveyed said they think they’ll get a lower tax refund because of COVID-19-related aid programs. Meanwhile, just 42% of Americans in the lowest household income bracket, or those earning below $50,000, said they believe they'll get a refund. Last year, 77% of taxpayers received a refund, according to the survey.

If you think you will receive a smaller refund this tax season but have debt you need to pay down, you could consider consolidating it with a personal loan. Visit Credible to find your personalized interest rate without affecting your credit score.


Families expect smaller refunds

Families with children living at home are the main demographic expecting lower refunds this year due to having received stimulus payments, such as advance child tax credits. In fact, about 38% of parents or guardians of children under 18 expect their refund to be lower, the Forbes survey said.

Many families already received half of their additional child tax credit through monthly payments in 2021. The child tax credit increased under the American Rescue Plan from $2,000 with the tax return to $3,000 for children ages six to 17 and $3,600 for children under six. 

However, half of the credit was paid out in monthly installments of $250 or $300 in 2021, depending on the child’s age, and expired at the end of the year. The remainder will be credited in a lump sum by the Internal Revenue Service (IRS) with the 2021 tax refund. Because half was already paid out, the amount families receive with their tax refund could be lower. 

If you are preparing to receive a lower federal income tax refund but wanted to use the funds to pay off outstanding debt, you could consider consolidating with a personal loan. Visit Credible to compare multiple lenders at once and choose the one with the best interest rate for you.


Families with lowest incomes could benefit most this tax season

Although many families earning below $50,000 said they do not believe they will receive a federal income tax refund this year, Forbes Advisor explained that those with the lowest incomes are likely to gain the most from expanded tax credits.

For 2021, married families earning below $19,900 pay the least amount of taxes at 10%, and those earning less than $81,050 pay in 12%, according to a tax calculator from TurboTax. After that, the tax percentage jumps to 22%. Besides paying less in taxes, lower income earners also qualify for more credits, such as the child tax credit.

If you find yourself with outstanding debt as you're looking at your finances this tax season, a personal loan could help. Consolidating high-interest debt with a personal loan could help put money back in your wallet. Contact Credible to speak to a loan expert to see if this is the right option for you and get all of your questions answered.

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