I’ve always filed my taxes as soon as I have all the necessary documents. It’s a daunting task and I prefer not to have it on my to-do list for long. One major perk to this – getting my refund early.
According to the annual tax return survey released by the National Retail Federation and Prosper Insights & Analytics, 22 percent of those surveyed have already filed their taxes, 37 percent plan to do so in February, 26 percent will file in March and 15 percent will take their time and file in April.
So, what are Americans planning to do with their refunds? Survey results show a record low number will spend their tax returns this year, while the second-highest number on record will put the money into savings.
“Financial security continues to be top-of-mind for all Americans, and consumers are hanging on to their tax refunds tighter than ever,” said Matthew Shay, president and CEO of the NRF, in a press release. “Consumers are leveraging their tax returns to build up their savings, but that’s good news in the long run because money saved today is money that can be spent down the road, particularly during the back-to-school and holiday seasons later this year.”
Forty-eight percent of consumers plan to put the money into savings, second only to last year’s record high 49.2 percent. In addition, 35.5 percent will use the money to pay down debt.
“Millennials are mindful of how they spend their hard-earned money these days, especially when it comes to any refund they expect from their taxes,” said Pam Goodfellow, consumer insights director at Prosper Insights & Analytics, in a press release. “Although Millennials and Gen X are focused on allocating their refunds to savings or reducing their debt, young adults are also apt to seize the opportunity to treat themselves to a little discretionary spending.”
Now, I’m usually a saver but this year my 2004 Chevy Impala (clocking in at over 210,000 miles) was just begging to be traded in. By the time my tax return was deposited, I had my eyes on the Chevy Malibu I now own. This purchase puts me in line with the 8.7 percent of consumers surveyed who will use this year’s refund for a major purchase, such as a car, television or furniture.
Of the 66 percent who are expecting a refund this season, only 20.9 percent of consumers will spend their refunds on everyday expenses, and 7.6 percent will splurge on special treats like dining out, apparel or spa visits. The number planning to spend the money on vacations dropped to 10.7 percent from last year’s 11.4 percent. In addition, 8.8 percent plan to use their refund on home improvements.
The survey, which asked 7,609 consumers about their tax return plans, was conducted February 1-8, 2017 and has a margin of error of plus or minus 1.1 percentage points. Full data results will not be published on NRF.com but news media and analysts who require additional information can contact press@nrf.com.