Taxes. We all do them, so why do so many myths about taxes and refunds persist? You probably believe one of the biggest myths about tax refunds: that people don’t get much back from the IRS. In fact, in 2015 the average refund was $2,815. In 2014, 13 percent got back a refund larger than $5,000. In the same year, 57 percent got at least $1,000.
Given what you see on TV, you probably believe you need the help of an accountant to get the biggest refund. Actually, there are many ways to get your taxes filed, and accountants aren’t even the most popular option. Only 22.2 percent of filers in 2015 used an accountant, and 18.4 used a preparation service. Compare that with the 37.4 percent who used computer software, and the 12.5 percent who actually filed using a paper return!
If filing online seems too difficult, rethink that opinion! More than 27.3 million people used a computer to do their taxes in 2015, which was up 6 percent from 2014. When you file online, you can often do a basic return free of charge. Many online tax programs let you input your information via a smartphone; just make sure you’re using a capable model on a fast, secure network, like the LG V10 from T-Mobile. Online services also automatically transfer your information to your state return and give you step-by-step help, so you’re never confused.
What do you plan to do with your refund? If you’re like 30 percent of people, you’re going to use it to pay off some of your debt. Maybe you’re like 28 percent of people, who will save it, or 26 percent, who use it on necessities. Only 7 percent of people plan to use their refund for something frivolous.
Below is a summary of myths and facts about your taxes.