The Tax Policy Center’s new report on income volatility finds that the majority of working age adults live in households in which income during at least one month per year will fluctuate significantly (at least 25 percent above or below average monthly income). The percentage of low-income, working-age adults who experience this fluctuation is especially high — 64 percent experience income volatility. Highly volatile income complicates tax filing, the report notes, and makes estimating a tax refund and tax credit amounts difficult. The result can be additional economic strain as families tend to plan and depend on a refund and/or tax credit to meet basic needs. Read the full report here: Income Volatility: New Research Results with Implications for Tax Filing and Liabilities.
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