Sure a new dishwasher, flat screen or spa weekend would be nice, but what about using that tax refund to pay down debt? That’s the plan for plenty of Americans, according to the National Retail Federation. Every year the organization polls Americans to see what they’re really going to do with that tax refund. And this year a big chunk of taxpayers say that check from Uncle Sam will go towards paying down debt. Here’s how the numbers break down:
- 44% of Americans say they expect to use their tax refund to pay off debt.
- 40% of taxpayers plan to sock their refunds away in savings.
- 29% will put it towards everyday expenses like house payments, car repairs and utility bills.
- 10% will take tax money and use it to go on vacation.
Using your tax refund to pay down debt can be a good idea– especially if you’ve got lots of it and your interest rates are high. But fewer Americans are using their tax refunds for this purpose as compared to last year, according to NRF. In 2009 48% of Americans surveyed said they would use money from filing tax returns to pay down debt. Some of this difference could be because fewer Americans are actually expecting a tax refund this year. Last year 68.4% of taxpayers polled were expecting that extra money, but this year that’s down to 65.5%.
Since the NRF has retailers’ best interest in mind, they’re hopeful that more Americans will hit stores to spend their refunds. Even though the bulk of people plan to put at least some tax refund money towards debt, the NRF is predicting that shoppers will be opening their wallets with more ease than last year. “A little bit of ‘free money’ will go a long way for Americans this year,” Tracy Mullin, president and CEO of the NRF released in a statement. “Retailers planning special promotions over the next few months may find that shoppers are a bit more receptive to opening up their wallets than they have been for the past year.”
What do you plan to do with your tax refund?
Related Articles
- IRS Won’t Share Debt Information Anymore The IRS announced changes to its policy regarding releasing information about taxpayers' debts. The debt indicators as they're called, used to be passed on to inquiring financial institutions, but now
- Rapid Tax Refunds Can Turn Into High Interest Loans As soon as tax season approaches the advertisements for Rapid Tax Refunds appear. They sound so simple up front: Get assistance filing a tax return online for a fee and
- Consumers Lose Millions To Tax Refund Operations Many consumers expecting a refund are anxious to get it as soon as possible. That makes them vulnerable to promises of quick tax refunds. They may need the money to
- What Should You Do With Your Income Tax Refund? Due to 2008's economic stimulus package, more Americans expect a sizable income tax refund than ever before. While that may seem like free money, remember: it's actually just money that
- Tax Preparers Promising Large Refunds Tax preparers that promise large refunds are to be approached warily. With tax season upon us, there is going to be a strong push by preparers from coast to coast
