According to new figures, the average taxpayer received a refund of $3,000 last year, which is up 5% from the previous year. Overall the IRS gave out $328 billion in refunds. Remember, that is YOUR money! Adjust your withholdings and enjoy that money all year long.
The jump was one of the biggest in years, thanks in part to several tax credits introduced as part of the American Recovery and Reinvestment Act.
The Homebuyer Tax Credit -- which gave buyers up to $8,000 for purchasing a home -- was expanded to include more taxpayers.
Meanwhile, the refundable American Opportunity Credit helped more students and parents pay for college tuition and course materials. It temporarily replaced the $700 non-refundable Hope Credit and gave students with income of $80,000 or less a credit of up to $2,500 a year.
(The Making Work Pay credit was part of the ARRA as well, but it didn't show up in refunds. Instead, it was distributed in paychecks.)
Refunds also likely received a boost from the sluggish unemployment picture, said Roberton Williams, a senior fellow at the Tax Policy Center.
