Retail group’s poll: Americans plan to use tax refunds to save money, pay off debt

Forty-nine percent of Americans who expect to get tax refunds this year plan to put the money into savings, a survey released Wednesday by the National Retail Federation (NRF) and Prosper Insights & Analytics found.

The figure is the largest percentage of Americans planning to save their refund money in the 12-year history of the survey, NRF said. Last year, 48 percent of those expecting refunds said they intended to use their refunds for savings.

Thirty-five percent of those expecting refunds said they would use the money to pay off debt, a much lower figure than the 48 percent who said they’d use their refunds for that purpose during the recession in 2009.

Twenty-two percent of Americans expecting refunds said they will use the money for everyday expenses, 12 percent said they’d use it for a vacation, 10 percent said they’d make “splurge” purchases, 9 percent said they’d use their refund for home improvements and 8 percent said they’d make a major purchase such as a television or a car. Survey respondents could choose more than one answer.

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“Tax return season is a time when consumers plan and prioritize financially, whether it is paying down debt or saving for a rainy day,” NRF President and CEO Matthew Shay said in a news release. “With the passage of tax reform and the expectation of more disposable income, we expect to see consumers prioritizing how and when they spend their hard earned dollars, especially during the back-to-school and holiday seasons.”

The 2018 filing season is the last time that taxpayers will file their taxes under the old tax code. Sixty-five percent of survey respondents said they expect a refund this year.

The IRS said that last year, the average refund amount was $2,895.

Nearly sixty percent of survey respondents said they plan to file their taxes by the end of February, while 27 percent said they expect to file in March and 14 percent said they expected to do so in April.

Prosper Executive Vice President of Strategy Phil Rist said that people ages 18-24 were most likely to say they’ve already filed their taxes this year, and were also more likely than other age groups to plan to use refunds for everyday expenses.

The poll had 7,657 participants and was conducted from Feb. 5-13. It had a margin of error of plus or minus 1.1 percentage points.