If you are a typical working American with a full-time job, then taxes are most likely your biggest expense. In fact, in 2017, American taxpayers paid over a trillion dollars in state and local taxes and over $3 trillion in federal taxes!
Interestingly, not all of this money ends up in Uncle Sam’s pockets and a lot of it goes back to the tax payer. While tax refunds may be smaller this year due to changes in withholding amounts, most taxpayers get a refund every year, with an average refund amount being as much as $2,000 or more per individual taxpayer in most states.
Believe it or not, some taxpayers don’t claim their annual tax refund. In 2018, the IRS posted on their site they had $1.1 billion worth of unclaimed refunds waiting to be claimed by their rightful owners.
Why would anyone miss out on their tax refund? The simple answer could be a lack of awareness and the complexity of the tax system, according to a NerdWallet 2018 tax study.
It’s no surprise that most Americans make simple tax preparation mistakes and find the whole tax preparation activity just too confusing. In 2017, for instance, as many as 97 million Americans paid their hard-earned cash for filing a tax return despite the fact that they were eligible for a free tax return program that allows anyone making under $66,000 a year file their taxes for free! Servicemembers and their families can often take advantage of free tax preparation services at their Installation's legal office.
Luckily, you don’t need to pay Uncle Sam more than your fair share this year! This infographic will give you a few basic tips that can help anyone maximize their annual tax refund.
LendUp is a socially responsible direct lender on a mission to provide anyone with a path to better financial health. We are a safer alternative to traditional short-term loans with no hidden fees or roll-overs and we offer the opportunity to build credit through the LendUp ladder for those who qualify.