A new survey suggests that many Americans won’t be in a rush to save their tax refunds this year. As reported by CNBC, about a third of taxpayers plan to spend their refunds right away, according to a poll of 1,000 adults conducted by tax preparation company Jackson Hewitt.
The survey further revealed that 22 percent of respondents plan to spend their refund within three to six months, while 23 percent plan to save it until they “need it most during the year.”
Focus on Necessities
The data suggest that the refund money will be used on necessities in many cases. More than 30 percent of respondents said that the funds will go toward settling major bills such as rent, medical bills, debt, and utilities. Another 15 percent claimed that they will spend the money on “essentials” like gas and groceries.
“Big refunds are a good thing for many millions of Americans because they take them and they spend them wisely,” Mark Steber, Jackson Hewitt’s chief tax information officer, told CNBC.
“They’re not spending it in Vegas or having a big pub crawl,” he added.
In fact, just 5 percent of those polled admitted that they planned to spend their refund on entertainment expenses, such as vacations and music concerts. Meanwhile, 2 percent of respondents said that they would put the money toward a major life event like a wedding or a home down payment.
More Americans Saving?
A separate survey conducted by LendingTree, however, yielded quite different results. A poll of more than 1,000 taxpayers found that 46 percent are planning to put their refund money into their savings accounts. That figure is up from 41 percent in 2021 and 40 percent in 2020.
“The next rainy day that comes may not be quite as stormy as this one, but it will definitely come, and extra savings makes you better prepared when it does,” LendingTree chief credit analyst Matt Schulz said in a statement.
“It is likely that many Americans have burned through much of the savings that they built up in the early days of the pandemic, even if they haven’t gone back into debt just yet,” he added.
The survey showed that following savings, 37 percent plan to pay off outstanding debt, while 30 percent of those making less than $35,000 a year will tap into the refund to pay for basic necessities like rent or groceries.
With about two weeks to go until tax day, the Internal Revenue Service has already sent out nearly fifty-eight million refunds worth a total of $189 billion. The average refund comes in at an impressive $3,263, which is about $350 more than last year’s amount of $2,902.
Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.