Rite of Spring

Mike Zaccardi

TAX SEASON IS HERE. You’ve probably received your W-2 and, if they haven’t arrived already, your investment tax forms may be just days away. If you’re like me, your email inbox has been inundated with tax-filing services pitching their latest deal. I’m no expert on which tax-prep provider is best, but each year I check this page for reviews of the major sites.

I have two other tips that might save you a few bucks. First, see if your brokerage firm offers a discount on sites like TurboTax and TaxAct. Second, your credit card might have a cashback offer if you use one of those sites. It’s not much, but those small savings can help shave your tax-prep fee.

I’m curious to see how this tax season goes, given 2021’s frustrations—including refund delays—that resulted from IRS staff shortages and a slow postal service. Ally Bank Consumer Research performed a survey late last month that suggests filers have low expectations.

The survey says 51% of consumers expect another season of delays. To speed things along, the IRS recommends Americans submit returns electronically—but 81% of folks already do. Ally’s survey of more than 1,000 consumers also found that half of respondents expect a refund. Among that group, 63% planned to file in January or February.

The average refund was $2,827 last year, according to the National Taxpayer Advocate. Two-thirds of those Ally surveyed expect refunds of $3,000 or less. What will recipients do with their windfall? Among those expecting a refund, 55% plan to save it, 33% will use it to pay down debt and 30% will invest part or all of it. Of those planning to invest, 57% are looking to traditional financial markets, while 28% are considering rolling the dice with cryptocurrencies.

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