Is Your Tax Refund Small This Year? Here’s Why And How To Get Cash
Is your tax refund small this year? You're not alone. According to the Internal Revenue Service, smaller-than-expected refund checks may be the norm in 2022. While last year’s average refund was around $2,800, this year’s average refund is expected to be around $2,300.
Here are a few reasons why — and how to get the extra cash you need.
Got A Small Tax Refund This Year? Here Are The Likely Reasons
Small tax refunds happen for a wide variety of reasons, but here are some of the most likely causes this year.
1. Tax Refund Small Primary Reason: You Took Advantage Of The Larger Child Tax Credit
Parents were able to get more cash by claiming child dependents in 2021, but most of the money was sent out that year in monthly payments. While the rest may be claimed this year on your taxes, it will likely be a smaller amount than what was claimed in previous years.
That means a smaller refund. For example, if you qualified for a $3,000 child tax credit, but received $1,500 in advance payments, you can only claim the remaining $1,500 on this year’s tax return.
Those who didn’t know that the CTC was an advance on the tax credit, may be surprised when the full credit amounts are not a factor in this year’s refund. Is your tax refund small? A credit in advance is likely to blame.
2. You Didn’t Have To Pay Student Loans
For everyone paying off extensive student loans, the federal government’s decision to temporarily halt loan repayments was highly beneficial. The downside is that during tax time, those with paused loans cannot write off the interest on student loans.
A tax refund will usually be lower when you can’t make that type of deduction. Usually, borrowers can deduct as much as $2,500 of student loan interest every year. Furthermore, since student loan tax refund offsets started again in February 2022, the government may keep your tax refund to repay debt incurred if you are in default on your student loan.
3. You Received Unemployment Benefits Or Got A New Job
Many taxpayers received unemployment aid last year. If taxes were not withheld from unemployment payments, they will have to be paid on this year’s tax return. During the 2021 tax season, many saw a tax break that did not include taxable unemployment compensation.
Similarly, the millions who scored a new job in the tax period will have a lower tax refund if they didn’t withhold enough from their new paychecks. In addition, those who landed a job with a higher salary — or those who successfully negotiated a raise to stay put — may now be in a higher tax bracket.
4. You Had A Mutual Fund That Did Well
The past year was particularly strong for most mutual funds that are actively managed, meaning there were higher-than-usual payouts — even in the double-digits — which means brokerage accounts will see extra taxes.
Other Common Reasons For Smaller Tax Refunds
Those in debt frequently see less-than-expected tax refunds — small because of overdue money owed to the federal government. Federal agencies may levy nontax debts and you could also have a tax debt tied to state income. Others have child support that is past due, leading to the IRS taking most of the overdue amount from a refund.
Loan repayments to both the U.S. Department of Housing and Urban Development and the Small Business Administration may also trigger a reduced tax refund.
Tax Refund Small? An Installment Loan Online Can Help
For those dealing with a financial emergency, a large tax refund can make a big impact. Smaller refunds may leave individuals scrambling for relief.
One option is an installment loan online. At Missouri Title Loans, Inc., you may qualify for an installment loan of up to $1,500 in as little as 30 minutes. You also get the cash you need the very same day you begin the process — or the very next business day at the latest.
All you need is a driver’s license or another type of state-issued I.D., proof of income through your most recent pay stub, and an open checking account statement in your name. Having bad credit does not instantly disqualify you from receiving an installment loan.
Simply fill out the short installment loan inquiry form on our website. After you submit, a loan representative will give you a call to discuss the terms of an installment loan (usually a set number of monthly payments) and review the required materials. They will then guide you through the rest of the fast and easy process.
Get Started Today
Millions of Americans rely on a hefty tax refund each year to make ends meet. A lower-than-expected refund check can be devastating. That’s where an installment loan online comes in. Submit a short online form on our website, give us a call, or check out a list of the installment loan near me stores on our Locations Page to get back on the right financial track today!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.