Forget looking forward to birthdays and Christmas, Americans are already thinking about how they will be using their tax refund if they get one according to a new survey by GOBankingRates. 16 percent of respondents plan on filing a return in January, 26 percent plan to file in February and another 16 percent will file sometime in March. The IRS forecasted that 70 percent of taxpayers would get a refund in 2018 but whether or not such a high percentage will get a refund in 2019 as a result of changes to the tax law still remains a mystery.
“It’s encouraging that the survey shows that the majority of taxpayers who expect to get a refund plan to use it to improve their finances,” says Cameron Huddleston, Life and Money Columnist at GOBankingRates. “A tax refund can feel like a windfall, but it’s important to keep in mind that it’s your money that you let the government hang onto all year. So it’s smart to use that money to pay off debt, build an emergency fund or boost retirement savings.”
The survey polled 1,001 Americans to find out their plans for their tax refunds. Participants could choose from a variety of options from investing it to splurging on a luxury purchase.
- According to the survey, the top thing that taxpayers plan to do with their refunds is pay off debt. This finding was not at all surprising as household debt in America is at an all-time high of $13.29 trillion, according to the Federal Reserve Bank of New York.
- 11% of respondents ages 18 to 24 and 13% of respondents ages 24 to 35 want to invest their refunds. Gen Xers ages 45 to 54 are the least likely to want to invest, with only 6% choosing this option.
- Women are more likely than men to want to use their refund to pay off debt – 30 percent versus 25 percent.
- On average, Americans expect to receive $3,000 on their tax refund. This amount is close to the average tax refund taxpayers have received in recent years.