Survey: Majority of taxpayers plan to save refund or pay off debt

LOS ANGELES – A new GOBankingRates.com survey shows three-quarters of U.S taxpayers plan to either save this year’s tax refund or use it to pay off debt.
The personal finance and consumer banking information firm surveyed 5,000 random participants through Google Consumer Survey from Dec. 30 to Jan. 1. And while the largest percentage of respondents, 30 percent, said they did not plan to receive a tax refund this year, the next largest percentage, 27 percent, said they would use their refunds to pay off debt, such as loans or credit cards.
A quarter of respondents said they would put the funds toward savings.
“Tax refunds are income that falls outside of Americans’ typical paychecks, so even through it’s earned and well-deserved, there is definitely a temptation to view it as ‘free money’ that can be splurged or even wasted,” said Elyssa Kircham, a GOBankingRates finance reporter on the study. “It’s really encouraging to see, however, that most people are planning to use a tax refund to better their financial situation by saving or paying off debt. Using a tax refund this way will buy the taxpayer more financial security and peace of mind, instead of one-off splurge that soon loses its value or is forgotten.”
Nine percent of respondents said they would put the money toward vacation, 5 percent said they would make a big-ticket purchase, such as a car or a home, and 4 percent plan to “splurge on a purchase,” meaning buying a TV, shoes or other accessories.
Other survey findings include:

  • One in five taxpayers plan to spend tax refund money.
  • Older respondents are twice as likely to not expect a tax refund as their younger counterparts.
  • Respondents ages 18 to 24 years old are over twice as likely as baby boomers to splurge or make a major purchase with their refunds.
  • Of those expecting a tax refund, women selected “pay off debt” 20 percent more frequently than men did.
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