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Gas Price Spike Threatens This Filing Season’s Bigger Tax Refunds

Economists say the oil shock tied to the Iran war is muting the expected spending lift from new tax-law refunds.

Overview

  • IRS data show the average refund near $3,676 as of early March, up about 10.6% from a year earlier after last summer’s tax changes expanded benefits.
  • The U.S. average gas price reached roughly $3.65 per gallon on Friday, about 70 cents higher than a month ago, lifting commuting and goods-transport costs.
  • GasBuddy estimates Americans have spent an additional $2.19 billion on gasoline since March 1, with analysts attributing the jump largely to the Iran conflict.
  • Pimco projects refunds are roughly $800 larger on average, a gain that could be absorbed by fuel and energy costs if oil remains above $80 per barrel.
  • Mortgage News Daily reports 30-year fixed rates at 6.41% versus 5.9% before the U.S. strike on Iran, intensifying budget pressures that fall heaviest on lower-income households.