LawFuel Attorney and Tax Newswire – The tax season is coming closer and taxpayers are discovering that the media has overblown the issue about paying taxes. As noted on April 9 by the IRS, the standard refund had increased about 5%. It has shown a steady increase from $102 to $2,090, over a period of time. The refunds were expected to rise by more than 25% under the Bush administration because of the $350 billion tax-cut shortage. This would increase the average refund by $300. Tax preparation has been on the lower end because the refunds are smaller than expected.
Other factors contributing to this trend are:
• The alternative minimum tax, which was initially designed to stop the wealthy from avoiding taxes, will affect more than 3 million taxpayers for the current year. Deductions and credits are vaporized by the AMT, and this eliminates the benefits of the tax cuts of the last year.
• There are many people who file taxes late, but due to confusion over filing they lose eligibility.
• People are not sure of filing taxes because they are not aware of the exact amount owed on stock dividends. May people were unemployed or had fewer hours at work last year which has resulted in incomes which are low. Refund anticipation loans are also a good option that can be considered by people.
• Bush administration said that benefits from tax cuts would be higher than expected. This will help the whole economy in many ways.
Economist had expected higher refunds, which would in turn provide a big stimulus to the economy, but the returns were not as per expectations. The economy is doing well even without high refunds. Maximum income tax refund can be obtained through IRS free Efile. Once you start paying taxes, Efile taxes option can be considered. Doing taxes online is really convenient and the returns are faster too