A new report from Bankrate.com reveals that 69% of Americans who expect to receive a federal tax refund this year have at least one worry about their returns. The most common concern is that their refund won’t make as big of an impact due to inflation/rising costs, followed by worries that the refund will be smaller than usual or delayed.
Additionally, the survey found that 75% of Americans who expect to receive a federal tax refund in 2023 say the money is important to their overall financial situation, up from 67% last year, with 43% saying their tax refund is significant to their financial situation. Among those expecting refunds this year, younger generations are more likely to say they have at least one concern about their tax refund.
Bankrate.com senior industry analyst Ted Rossman commented, “It’s reasonable to expect many people to receive smaller tax refunds this year. That’s mostly because many pandemic-related tax breaks have expired: Stimulus payments, the expanded child tax credit, and the expanded child and dependent care credit, to name a few.”
Americans’ top priorities with tax refund money this year are paying down debt and boosting savings. Last year, more people prioritized savings over debt payoff. Additionally, 13% of respondents who anticipate receiving a refund plan to use most or all of the money to pay for day-to-day expenses, 8% will spend on home improvements, 7% will finance a vacation, 5% will invest the funds, and 3% will splurge on retail purchases.
The survey also found that lower-income households are most likely to say their refund is vital to their overall financial situation. Meanwhile, older generations expecting refunds are more likely to use the money to pay down debt than younger generations.
Methodology:
Bankrate.com commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,367 US adults (18+), including 907 expecting a federal refund. Fieldwork was undertaken February 1-3, 2023. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
