WASHINGTON -- Whether they’re putting it aside for a rainy day or a big getaway, more Americans this year plan to save -- not spend -- their tax refunds this year. Of those expecting refunds, 43.8% will stash some of the cash in savings, up from 42.1% who said the same last year.
That's the highest percentage in the nine-year history of the National Retail Federation's Tax Returns Consumer Survey conducted by BIGinsight. This year, 66.2% of taxpayers are expecting a refund, the exact same as last year.
“After a rocky few years, consumers are now more vigilant about how they spend their money and the importance of preparing for future financial stability,” said Matthew Shay, NRF president and CEO. “Increased consumer savings proves extremely beneficial to shoppers and businesses in the long run, allowing future opportunities to invest in a large household item or even take advantage of a well-deserved family vacation.”
Some 39.4% of those who expect a tax refund will use some of the money to pay down debt, and 28.7% plan to use their “free cash” for everyday expenses. A few will throw caution to the wind and use their refund for a major purchase, such as a car or new television (12.3%) and vacation (11.3%).
More so this year than in the past, Americans are eager to file their taxes; 64.4% will have filed by the end of February, the highest since 2006, the survey found. An additional 21.3% will file in March and 14.3% will wait until the last minute and file in April.
Not surprisingly, the number of people who file their taxes online continues to increase. This year, 60.7% will file their taxes online, up from 57.6% last year. Additionally, 36% will prepare their taxes using computer software, 21% will use an accountant, 18.7% will use a tax preparation service, 10.6% will have a friend, spouse or other relative prepare their taxes for them, and 13.8% will prepare their taxes by hand.
“For some, tax season is a way to reward themselves, for others it is the perfect opportunity to get ahead on their bills or other expenses,” said Pam Goodfellow, consumer insights director, BIGinsight. “Whatever the decision, many consumers this year are looking forward to taking back some of their hard-earned money from Uncle Sam.”
The National Retail Federation is the world’s largest retail trade association.
Published by The Business Journal, Youngstown, Ohio.