April 15 is no longer as dreaded as it once was. Yes, there’s still the paperwork to file, but for millions of Americans, there won’t be a check to write. According to the Tax Policy Center, nearly half of Americans won’t pay any federal income tax. The recession reduced incomes for many meaning they’ll pay lower taxes. Combine that with credits, deductions and exemptions and lots of Americans don’t owe anything.
According to statistics, an American family can make as much as $50,000 and not owe a dime in federal income tax. While 47 percent won’t pay federal income tax this year, that’s up from 38 percent just two years ago. So for those that are getting a big fat refund, what are they spending it on? A new poll from Bankrate found these answers:
- 84% are using it to pay down debt, invest or use it for necessities.
- 7% will take a vacation or go on a shopping spree.
What about those who have to pay? Are they ready to fork over that money to Uncle Sam?
- 40% of those who owe the government money say they don’t know how they’re going to pay their taxes.
- 6% will be borrowing money to pay their taxes
- 17% are setting up a payment plan with the IRS to pay in installments
- 63% will pay with funds in their bank accounts
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