RISMEDIA, April 6, 2010—A new study released by Bankrate, Inc. shows that, with economic uncertainty still lingering, many Americans plan to use their tax refunds in a fiscally conservative fashion, with 84% intending to pay down debt, save or invest, or use it for everyday necessities. The poll was conducted by Princeton Survey Research Associates International.
Among the findings:
-Fifty-five percent of Americans polled expect to get, or have received, a tax refund this year while 24% expect to owe;
-While 84% plan on using their money to pay down debt, save, invest, or use the refund for everyday necessities, only 7% plan on using their money on “fun” activities like shopping or taking a vacation;
-Within that 84% of fiscally conservative Americans, 30% intend to pay down debt, 28% say they will save or invest, and 26% anticipate spending their refund on food or utility bills;
-While just 3% of those getting a refund took a refund anticipation loan, among people with incomes under $30,000 that number is doubled at 6%;
-Only 19% of Americans plan to adjust their paycheck withholding to avoid a big refund next year while 71% plan on keeping their withholding the same;
-Among those who anticipate owing money, 63% plan on paying their taxes straight from their bank accounts. Only 6% anticipate borrowing money to pay off their tax bill;
-Additionally within those who owe money, 17% plan on setting up an installment plan with the IRS. But be warned, setting up a plan with the IRS includes interest, late fees, and a user fee to begin installment payments.
“Since a tax refund is often the biggest windfall many Americans receive all year, it is imperative to use it wisely,” said Greg McBride, CFA, senior financial analyst for Bankrate.com. “Padding emergency savings, establishing or boosting an IRA, and paying down high interest rate debt are all great uses. But go one step further and adjust your paycheck withholding so you’re not giving an interest free loan to the government in 2010 also.”
For more information, visit www.bankrate.com.
