Federal Reserve data shows that the total debt of American households reached $17.5 trillion last year, with credit card and car loans both reaching record highs; many people willtax refundThis money is used to repay the loan.
According to statistics, the debt-to-population ratio reaches its highest point before the tax filing season and increases year after year.
People with rising loan balances will use tax refundscheckdebt repayment; Most checks are sent out by the Treasury Department between February and April. Lending website LendingTree found that nearly 40% of the U.S. population relies on tax exemption subsidies, an increase of 4 percentage points from last year. As of mid-March this year, the average tax rebate amount was 3,109 yuan.
Tax rebate checks are a welcome relief for the growing number of people who can’t pay their bills, especially young people.Low incomeEthnic group.
If your employer typically withholds extra taxes from your pay, you’ll get a tax refund when you file your taxes each year. According to Internal Revenue Service data, in 2023, approximately 106 million individual income tax returns in the United States received tax refunds, accounting for about 65%.
A survey by Pew Research found that people with student loans typically have credit card debt; Since the end of the pandemic student loan relief program last year, many student loan borrowers have faced financial strain.
Tax rebate checks are being sent one after another, and household income and expenditure have increased significantly.
Data from the JPMorgan Chase Institute shows that tax rebate checks continue to be sent by mail, and monthly household incomes across the United States were 30% above average in March. The day after the tax rebate checks were distributed, spending increased by 119%.
Retail performance has also been significantly affected. Family Dollar saw double-digit sales growth in product categories such as home decor and renovation.
The annual survey by Bankrate, which specializes in providing financial data, shows that the two main uses of tax refunds are savings and daily spending; Additionally, one in five Americans plans to use most of their tax refund this year to pay off debt.
Tax refunds have always been a financial lifeline for people living on the brink of poverty.
Moody’s Analytics data over the past decade shows that credit card delinquency rates declined at the beginning of tax season in February and reached their lowest point in May; A similar trend was seen for car loans.
Refunds represent a relatively large share of annual income for low-income families, and even greater for families who receive tax credits such as the Earned Income Tax Credit and Child Tax Credit; Tax credits often coincide with tax refunds distributed.
Lauren Jones, a professor of public policy at Ohio State University, said that tax refunds and tax credits combined can amount to as much as 40% of a family’s annual income, and they could be left in debt for the next year just to meet daily expenses. Can. ,
consumption(tagstotranslate)tax exemption