A tax refund is when the IRS gives you money back because you’ve paid more taxes than you needed to. It’s worth filing your taxes as you could be owed over $2,700 according to national figures.
But is this money itself taxable? Should you include this sum in next year’s tax return? Figure out if you’re likely to be taxed or not with our helpful guide.
Are refunds taxable?
Federal income tax refunds are not taxable, so you don’t need to declare these as income. However, the interest generated on both federal and state income is and so you should include this on your next tax return.
In some circumstances, state income tax refunds may be taxable too. This depends on how you filed your taxes last year. If you didn't itemize deductions and took the standard deduction then your refund won’t be taxed.
Itemizing is where you calculate your own deductions rather than applying the standard tax return. Those who did itemize may be taxed, depending on state rules and what you’ve agreed to on previous tax returns.
Some people can claim back more money when making their own itemized deductions over the standard offer, so it's a good idea to check beforehand.
Loading your refunds onto a prepaid card
Safe and easy to set up, there are plenty of reasons why you should use a reloadable prepaid card for your tax refund.
You can pick up a prepaid card from any of the Kroger Family of Stores. Either choose to get your tax return loaded straight onto the card or cash your IRS check first. A prepaid card is quick to set up – no matter what you need it for.
Interested in loading a prepaid card, or want to know more? Check out our prepaid card guide or head in-store, where one of our friendly store associates will be able to answer any questions you may have