Latest news with #Greene-Lewis
Yahoo
30-03-2025
- Business
- Yahoo
What is the average tax refund? Why yours might be lower or higher
The average tax refund filers have received this year is $3,271, up about 5% from this time in 2024, according to the IRS' most recently released data on March 14. But Tax Day is almost here and tens of millions have yet to file. Experts agree that waiting until the last minute to meet the April 15 deadline ensures people are more likely to make mistakes. TurboTax CPA and tax expert Lisa Greene-Lewis said the earlier you start, the better. 'People who procrastinate tend to rush and they leave things out,' Greene-Lewis said. If you're among the nearly 70 million Americans who have already received your tax refund, you may be wondering why yours is higher or lower than the average. Although the direct deposit or check is sometimes Americans' largest financial transaction of the year, experts say it's not necessarily a bad thing if your refund was far from $3,271. Everyone's circumstances are different. There were no major changes in tax law in the last year. Experts said the average refund is expected to be relatively similar to what it was in 2024, adjusting for inflation, as the standard deduction and some credits are taken into account. Tax returns are deeply personal and many factors and life changes can affect yours. Here's what to know about why your refund may be different from the average: More: Tax deductions and credits may boost your refund. Which ones are available to new filers? A raise boosting your income bracket, a new job or side hustle, a newborn baby – these are just some of the reasons your tax refund might look different this year. 'It's intensely personal. Well, did you have another kid? Did you get married? Did someone go to college? Did you increase your withholding with your employer? Did you become self-employed?' said Andy Phillips, vice president of the Tax Institute at H&R Block. Some of the most important factors affecting your refund are your income and the amount you or your employer withheld for taxes throughout the year. Broadly speaking, if you withheld a lot, you'll see a higher refund than someone who did not. However, that's not always the case. If you withheld a lot for taxes but didn't take advantage of credits and deductions you qualified for, your refund could be lower than someone who withheld less but made sure to take the earned income tax credit, the savers credit, and relevant deductions. The IRS estimates that roughly one in five eligible taxpayers miss out on claiming the earned income tax credit each year which can save filers up to $7,830 depending on their filing status. The truth is it depends on personal preference. 'Some people like that forced savings mechanism,' Phillips said. 'Or it may be that their choice is 'No, I'd like to get as close to zero as possible.'' He added that for some, a high refund enables them to pay for car repairs, braces for their kids, or unplanned expenses but 'it's really a choice.' Mark Steber, chief tax officer at Jackson Hewitt Tax Services, said if you're unhappy with your low refund it might be because you didn't hire a trained professional or didn't put in time yourself to learn how to maximize it. 'TikTok videos are not the investment in your largest single financial transaction, nor is talking with your uncle Bob, who watches TikTok,' Steber said. He added that you can learn by reading articles and listening to reputable podcasts, but you'll need to set aside time to understand how things like self-employment, working from home, cryptocurrency investments, and property ownership can all affect your tax balance. If you think you aren't eligible for a refund and instead may owe money to the IRS, Phillips said the best thing you can do is file your taxes early. 'Even if you file today, you don't have to pay until April 15,' Phillips said. 'If you wait to the last minute, you're going to be rushed. You may not have the same time to figure out 'What are my options?'' Those options may include pulling money from a savings account, paying with a credit card, or setting up an installment agreement with the IRS. You may have a few other options to reduce your federal taxes after the year's end. The biggest one, experts said, is making a tax-deductible contribution to a traditional IRA if you're eligible and haven't already hit your maximum contribution. 'You can make a contribution if you're eligible, right now, up to April, and take a deduction in 2024 and basically have the government subsidize your contribution to a degree,' Steber said. There are a lot of caveats, including income level and spousal status with this option, Steber said. However, he said it's a time-tested and proven tax benefit filers can take advantage of after year's end. Reach Rachel Barber at rbarber@ and follow her on X @rachelbarber_ This article originally appeared on USA TODAY: Why your tax refund may be different from the average Sign in to access your portfolio
Yahoo
26-03-2025
- Business
- Yahoo
Adult children caring for parents: What to know about filing taxes as a caregiver
As parents get older and their children do, too, there comes a time when the caregiving role is reversed. And caregiving can be costly. More than 48 million Americans are caregivers, and the average caregiver spent $7,242 in out-of-pocket expenses in 2021, according to the AARP. Last year, a survey found more than half of adults with at least one living parent claimed that parent on their taxes. More: Don't get caught with a huge tax bill. What new retirees can do to avoid one. Adult children who care for their parents can claim their parents as dependents on their taxes if: The parent is a U.S. citizen, a U.S. national or a resident of Mexico or Canada. The parent earned less than $5,050 in taxable income last year. Social Security income generally doesn't count, though there are some exceptions. You provided over half of their financial support including meals, housing, medical bills and other living expenses. Your parent does not have to live with you to be claimed as a dependent, according to Lisa Greene-Lewis, a CPA and tax expert at TurboTax. And you don't need to provide proof that you've been covering more than half of your parent's finances in your taxes. But she suggests keeping those receipts handy in case you are audited. More: Family caregivers spend $7,200 a year. This proposed federal tax credit could help If you claim your parent as a dependent on your taxes, then there's no need to submit a return on their behalf, Greene-Lewis said. Adult children who claim their parents as dependents cannot be claimed as dependents themselves by another taxpayer, and the parent can only be claimed by one caregiver. Other qualifications regarding claiming dependents on your taxes can be found on the IRS website. Single adult children who care for their parents will see a larger standard deduction on their taxes, Greene-Lewis said. Typically, single taxpayers see a deduction of $14,600. But if you file as head of household and claim your parent as a dependent − again, even if you don't live with your parent − that deduction could rise to $21,900. If your parents give you money to offset their expenses, that money is not taxable to you, according to the IRS. Yes, caregivers can claim their parents' medical expenses on their tax returns. Those deductions must be itemized and total more than 7.5% of your adjusted gross income. That can include insurance premiums, doctor's visit costs, prescriptions and other medical bills. If you don't have some of those receipts on hand, Greene-Lewis suggests going to the pharmacy where your parent usually gets their medications. They should be able to print out a prescription history, she said. You can also go through your own credit card statements to gather the same information. Madeline Mitchell's role covering women and the caregiving economy at USA TODAY is funded by a grant from Pivotal Ventures. Pivotal Ventures does not provide editorial input. Reach Madeline at memitchell@ and @maddiemitch_ on X. This article originally appeared on USA TODAY: Filing taxes as a caregiver: Can I claim my parent as a dependent? Sign in to access your portfolio
USA Today
26-03-2025
- Business
- USA Today
Adult children caring for parents: What to know about filing taxes as a caregiver
Adult children caring for parents: What to know about filing taxes as a caregiver As parents get older and their children do, too, there comes a time when the caregiving role is reversed. And caregiving can be costly. More than 48 million Americans are caregivers, and the average caregiver spent $7,242 in out-of-pocket expenses in 2021, according to the AARP. Last year, a survey found more than half of adults with at least one living parent claimed that parent on their taxes. More: Don't get caught with a huge tax bill. What new retirees can do to avoid one. Adult children who care for their parents can claim their parents as dependents on their taxes if: The parent is a U.S. citizen, a U.S. national or a resident of Mexico or Canada. The parent earned less than $5,050 in taxable income last year. Social Security income generally doesn't count, though there are some exceptions. You provided over half of their financial support including meals, housing, medical bills and other living expenses. Your parent does not have to live with you to be claimed as a dependent, according to Lisa Greene-Lewis, a CPA and tax expert at TurboTax. And you don't need to provide proof that you've been covering more than half of your parent's finances in your taxes. But she suggests keeping those receipts handy in case you are audited. More: Family caregivers spend $7,200 a year. This proposed federal tax credit could help If you claim your parent as a dependent on your taxes, then there's no need to submit a return on their behalf, Greene-Lewis said. Adult children who claim their parents as dependents cannot be claimed as dependents themselves by another taxpayer, and the parent can only be claimed by one caregiver. Other qualifications regarding claiming dependents on your taxes can be found on the IRS website. Single caregivers get higher deductions Single adult children who care for their parents will see a larger standard deduction on their taxes, Greene-Lewis said. Typically, single taxpayers see a deduction of $14,600. But if you file as head of household and claim your parent as a dependent − again, even if you don't live with your parent − that deduction could rise to $21,900. If your parents give you money to offset their expenses, that money is not taxable to you, according to the IRS. Can you claim medical costs on tax returns? Yes, caregivers can claim their parents' medical expenses on their tax returns. Those deductions must be itemized and total more than 7.5% of your adjusted gross income. That can include insurance premiums, doctor's visit costs, prescriptions and other medical bills. If you don't have some of those receipts on hand, Greene-Lewis suggests going to the pharmacy where your parent usually gets their medications. They should be able to print out a prescription history, she said. You can also go through your own credit card statements to gather the same information. Madeline Mitchell's role covering women and the caregiving economy at USA TODAY is funded by a grant from Pivotal Ventures. Pivotal Ventures does not provide editorial input. Reach Madeline at memitchell@ and @maddiemitch_ on X.
Yahoo
24-03-2025
- Business
- Yahoo
Filing taxes for the first time? What Gen Z need to know as the deadline approaches
Few people enjoy filing their tax returns but for younger generations, the season can be particularly taxing. In fact, more than half of Gen Z members reported they feel anxiety about doing their taxes this year, according to a recent CNET survey. Of the Gen Zers surveyed, 33% said they feared making a mistake, 18% said they worried their information could be at risk to scammers, and 15% said they were concerned they would owe more to the IRS than they could afford. "It's really intimidating, and every season I'm forever feeling like I don't know what I'm doing," Alyssa Melani, 23, told USA TODAY. But no matter how anxiety-inducing the process may be, the April 15 deadline for filing federal tax returns is approaching. If you miss it, you could face late payment penalties and interest, unless you request an extension. CPA and TurboTax expert Lisa Greene-Lewis said it's not something you should wait to do until the last minute. 'The earlier the better,' Greene-Lewis said. Here are 5 things to know before the 2025 tax season comes to an end: More: Tax deductions and credits may boost your refund. Which ones are available to new filers? Even if the IRS does not require you to file a return, you may still want to. If your employer withheld any portion of your pay for taxes, you may qualify for a refund. The IRS has said it has more than $1 billion in unclaimed returns. A Talker Research survey on behalf of TurboTax found that 20% of Gen Z believe they don't need to file tax returns. "They make under the IRS income threshold, but they are leaving money on the table," Greene-Lewis told USA TODAY. If you're part of the one-third of Gen Zers worried about making a mistake while filing your return, you may want to pay extra attention when inputting your social security number. Greene-Lewis said inputting it wrong is one of the simplest yet most common mistakes that can get you into trouble when doing your taxes. Tax deductions can lower your amount of taxable income, while tax credits can reduce the amount of tax you owe. If you take some time to research them, you could save hundreds, if not thousands, of dollars. If you're not sure which ones you may qualify for, USA TODAY has you covered. We've compiled a list of some common deductions and credits new tax return filers can take If you are living with a parent or guardian, or receiving their help for tuition or living expenses, they will probably claim you as a dependent on their tax returns You'll need to note your status as one on yours as well. Dependents are qualifying children younger than 19, or 24 if a full-time student, according to the IRS. To qualify, dependents cannot provide more than half of their own annual financial support. If you find tax season confusing, you're not alone. Around half of taxpayers enlist a tax professional to help them file but Gen Z is the least likely to seek professional assistance, a 2021 IRS survey found. If you decide to file by yourself, IRS Direct File may be able to help. The program simplifies the returns process and allows taxpayers in 25 participating states to file directly online. Several taxpayers, like Melani, also turn to family members for guidance. Others turn to social media and even AI chatbots for advice, according to the CNET survey, but experts including Greene-Lewise warn filers not to believe everything they hear online. Reach Rachel Barber at rbarber@ and follow her on X @rachelbarber_ This article originally appeared on USA TODAY: What Gen Z needs to know when filing taxes for the first time Sign in to access your portfolio
USA Today
23-03-2025
- Business
- USA Today
Filing taxes for the first time? What Gen Z need to know as the deadline approaches
Filing taxes for the first time? What Gen Z need to know as the deadline approaches Show Caption Hide Caption How to file for a tax extension? Running out of time to do your taxes? Filing for a six-month extension is simple. Josmar Taveras, USA TODAY Few people enjoy filing their tax returns but for younger generations, the season can be particularly taxing. In fact, more than half of Gen Z members reported they feel anxiety about doing their taxes this year, according to a recent CNET survey. Of the Gen Zers surveyed, 33% said they feared making a mistake, 18% said they worried their information could be at risk to scammers, and 15% said they were concerned they would owe more to the IRS than they could afford. "It's really intimidating, and every season I'm forever feeling like I don't know what I'm doing," Alyssa Melani, 23, told USA TODAY. But no matter how anxiety-inducing the process may be, the April 15 deadline for filing federal tax returns is approaching. If you miss it, you could face late payment penalties and interest, unless you request an extension. CPA and TurboTax expert Lisa Greene-Lewis said it's not something you should wait to do until the last minute. 'The earlier the better,' Greene-Lewis said. Here are 5 things to know before the 2025 tax season comes to an end: More: Tax deductions and credits may boost your refund. Which ones are available to new filers? You may want to file even if you don't need to Even if the IRS does not require you to file a return, you may still want to. If your employer withheld any portion of your pay for taxes, you may qualify for a refund. The IRS has said it has more than $1 billion in unclaimed returns. A Talker Research survey on behalf of TurboTax found that 20% of Gen Z believe they don't need to file tax returns. "They make under the IRS income threshold, but they are leaving money on the table," Greene-Lewis told USA TODAY. Make sure you input your social security number correctly If you're part of the one-third of Gen Zers worried about making a mistake while filing your return, you may want to pay extra attention when inputting your social security number. Greene-Lewis said inputting it wrong is one of the simplest yet most common mistakes that can get you into trouble when doing your taxes. Don't miss out on credits or deductions Tax deductions can lower your amount of taxable income, while tax credits can reduce the amount of tax you owe. If you take some time to research them, you could save hundreds, if not thousands, of dollars. If you're not sure which ones you may qualify for, USA TODAY has you covered. We've compiled a list of some common deductions and credits new tax return filers can take Check if you are a dependent If you are living with a parent or guardian, or receiving their help for tuition or living expenses, they will probably claim you as a dependent on their tax returns You'll need to note your status as one on yours as well. Dependents are qualifying children younger than 19, or 24 if a full-time student, according to the IRS. To qualify, dependents cannot provide more than half of their own annual financial support. Don't be afraid to ask for help If you find tax season confusing, you're not alone. Around half of taxpayers enlist a tax professional to help them file but Gen Z is the least likely to seek professional assistance, a 2021 IRS survey found. If you decide to file by yourself, IRS Direct File may be able to help. The program simplifies the returns process and allows taxpayers in 25 participating states to file directly online. Several taxpayers, like Melani, also turn to family members for guidance. Others turn to social media and even AI chatbots for advice, according to the CNET survey, but experts including Greene-Lewise warn filers not to believe everything they hear online. Reach Rachel Barber at rbarber@ and follow her on X @rachelbarber_
