February 20, 2024

Here’s how Americans plan to spend their tax refunds


American taxpayers anticipating a refund in 2024 say they have already got an concept of what they are going to do with the cash. A majority say there will not be any left over for financial savings after they parcel it out.

The majority of taxpayers can usually anticipate to obtain a refund from Uncle Sam, and for a lot of households, the cash will be substantial. Nearly three-quarters of filers received a tax refund in 2023, with a median cost price about $3,176.

young woman paying bills at kitchen table

Nearly three-quarters of U.S. taxpayers can anticipate to obtain a tax refund this yr. (iStock / iStock)

A current research launched by Assurance IQ discovered that of the 72% of customers anticipating a refund from the Internal Revenue Service this yr, greater than a 3rd, 36%, plan to repay debt with the funds, and 30% plan to use it to make amends for their month-to-month payments.

Less than half, 42%, plan to put no less than a few of their refund into financial savings.

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“Inflation has slowed, however increased costs proceed to affect customers’ financial wellness,” stated Kate Long, client monetary wellness advocate at Assurance IQ. 

The Internal Revenue Service (IRS) building

The Internal Revenue Service constructing in Washington, D.C. (Stefani Reynolds/AFP by way of Getty Images / Getty Images)

Notably, the survey discovered that 29% of customers are contemplating utilizing their tax refunds to pay for insurance coverage as premiums continue to rise – together with almost half (48%) of Gen Z.

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“Lower earnings households who stay paycheck to paycheck have been hit hard by inflation,” Long stated. “An influx of cash, such as a tax refund, can be a lifeline that helps them catch up on outstanding debt or cover critical expenses, like insurance.”

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Around 23% of customers anticipating a refund plan to use their tax refund on one thing “fun,” the survey discovered, whereas 19% plan to make investments it and three% plan to donate it. Around 12% are undecided on how they are going to spend it.

FOX Business’ Megan Henney contributed to this report.



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