Even though the deadline for filing tax returns is weeks away, many of the refunds that people will be receiving are already as good as spent. According to a new poll by Capital One Bank, 33 percent of Americans plan on spending their tax refund this year, while 27 percent of plan on saving the refunded money.
The Internal Revenue Service estimates the average tax refund will be $2,913 this year.
The poll found that the current economic situation is not going to affect what a majority of people do with their returns. For the most part, people plan to spend their tax refunds on everyday expenses. Other popular planned purchases include:
- Major items such as a car or appliance (9 percent)
- Vacation (8 percent)
- New clothing and accessories (6 percent)
- Electronics (5 percent)
On the other hand, people looking not to spend their tax refunds intend to either pay down debt or invest the return.
As for people who will owe taxes, they say they will be paying off the debt in a variety of ways. According to the poll, 32 percent will use a portion of their savings to pay what they owe. A quarter of people will use money they specifically saved for taxes, and 19 percent of people will pay through a payment plan with the Internal Revenue Service.
Surprisingly, just 11 percent of survey respondents said they plan to file this year's return at the last minute.
"A tax refund is often seen as free money, which makes it very tempting to spend it right away , but it’s important to remember that the refund you're getting back is your own money," said Mickey Konson, managing vice president for retail banking at Capital One Bank. "Tax season is a good opportunity for people to plan ahead, with an eye toward their future goals and financial health."
The information in the Capital One Bank annual Taxes and Savings Survey was based on the responses of 1,025 people.
Reach BusinessNewsDaily staff writer David Mielach at Dmielach@techmedianetwork.com. Follow him on Twitter @D_M89.