Nearly half (46%) of taxpayers don’t know a refund comes for overpaying taxes to the federal government.
That is one finding of a survey of taxpayers by Credit Karma.
About 70% of Americans typically expect to receive a refund check each year, and many are unsure about the origins of the money.
While 46% knew their tax refund money comes from their paychecks, an equal percentage thought the money was given to them by the government.
Forty percent knew that getting a tax refund means they overpaid income taxes.
About 11 percent knew it meant they were essentially giving the government an interest-free loan.
More than half of respondents (51 percent) did not know they could determine whether they get a refund each year by adjusting their withholding amounts.
More than half said they would rather get a tax refund than consistently have more money in their paychecks throughout the year.
Only 34% said they would prefer to have proper withholding.
According to data from the IRS, the average refund amount as of February 7 was $1,952–up 0.2 % (or $3)–when compared with 2019. The number of refunds issued was down 4.8%, as the tax agency paid 4.6% less cash.

A relatively new financial movement aims at financial independence and early retirement, sometimes extremely early retirement.
And that’s the name of the movement: Financial Independence; Retire Early.
Adherents say people can retire in their 40s or even 30s if they practice extreme saving and investing.
The key idea is to enlarge the gap between necessary expenses and income. The money in the gap is what you invest.
As a practical matter that means closely tracking expenses, eliminating anything that isn’t necessary. Make sure your living arrangements are as inexpensive as possible. Eliminate all debt. Cut expenses to the extreme. Then, enlarge the gap by side jobs or part-time jobs to create a big monthly investment number.
FIRE people try to make sure they max out 401K and retirement programs, while saving extra on the side. They intend to retire before they can withdraw funds at age 59 and a half. They also have to make enough money to buy private health insurance.
FIRE retirees actually don’t think of retirement as a way to stop work. They think of it as a way to work the way they want, without worrying about money.
Semi-anonymous blogger Roman, founder of TenFactorialRocks.com, says this can even be done with children. While the USDA says it costs $11,000 to $12,000 per year to raise a child, Roman says it costs more like $4,200 to $7,000 a year, depending on day care costs. Roman writes, “Kids want your time and attention more than expensive gifts, lavish vacations, overpriced tutors and royal treatment summer camps.”
On the other hand, Lisa Harrison of the Mad Money Monster blog, rejected the FIRE movement in favor of simple living. When trying FIRE, she and her husband cut out every single extra expense, from coffee dates to dinners, and they found that, after two years, their savings were up but their happiness was down. They decided to simply live in a frugal manner, saving money regularly, keeping expenses down, but going on dates and buying pizza. “A feeling of relief washed over me,” she writes.

Baby Boomers (aged 54 to 74) are holding on to their beloved homes, but selling and downsizing now could not only save a lot of headaches, it could also make a tidy profit.
Interest rates are low with the national average rate hovering around 3.6% to 3.9%. Buyers are plentiful. In most areas, there are more buyers than houses for sale. That means a great house for sale could snag a great price.
One option for downsizing is condo living, which can bring a host of benefits to retired Boomers. Condo retirement communities offer a community where people interact and make new friends. Some have parties and even social events for people from the same area. And, you can admire the landscaping without having to mow and trim.
A condo in the city brings the excitement of shopping and entertainment within walking distance. Or, an Uber is just a click away. No more commutes.
Selling that big home and buying a smaller home can add to your nest egg and, if you want, bring you closer to the kids. It’s also a good way to bring the pets along. Along the way, downsizers save big on smaller utility and maintenance bills.
One other consideration: It is always easier to finance a home before retirement. If you have the will and the way, make your move while the market is perfect.