Most Americans don’t expect their tax refund to last long.
In fact, 1 in 3 taxpayers plan to spend their refunds immediately, a new survey from tax preparation firm Jackson Hewitt shows. The company surveyed 1,000 American adults in March 2022.
Another 22% of Americans plan to spend their refund within three to six months, while 23% plan to save until they “need it most of the year”. The rest of those surveyed did not expect to receive a refund.
The average tax refund issued so far this tax season is $3,263, according to IRS data.
But Americans don’t plan to spend their refunds on electronics and dinners: 31% of respondents said they would spend it on large bills, including rent, medical bills, debt and utilities. . And 15% said they would spend the refund on “necessary things,” such as gas and groceries.
Only 5% of taxpayers surveyed said they plan to spend their tax refund on entertainment expenses like vacations and concerts, while 2% said they would spend it on major events. like a wedding or buying a house.
Mark Steber, director of tax information for Jackson Hewitt, said that Americans are planning to spend refunds on essentials is nothing new. “Big cashbacks are a good thing for millions of Americans because they receive and spend them wisely,” he told CNBC Make It. “They don’t spend it in Vegas or have a big pub crawl.”
However, Steber encourages taxpayers who receive a refund to treat themselves with 10% of it, if they can afford it. “Let’s do something frivolous,” he said. “Buy yourself a big TV or go on a family trip.”
But whatever you do, don’t wait to send yours back. The penalty for your failure to file your taxes by April 18 is 5% of your unpaid tax for each month in which your return is delayed, up to a maximum of 25%. You can also 0.5% increase in fines per month unless you pay an estimated amount by Tax Day.
Taxpayers have the option file for an extensionthat will give them six more months to receive their profits by October 17th.
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