American taxpayers expecting a refund in 2024 say they already have an idea of what they will do with the money. A majority say there won’t be any left over for savings after they parcel it out.
The majority of taxpayers can typically expect to receive a refund from Uncle Sam, and for many families, the money can be substantial. Nearly three-quarters of filers received a tax refund in 2023, with an average payment worth about $3,176.
A recent study released by Assurance IQ found that of the 72% of consumers expecting a refund from the Internal Revenue Service this year, more than a third, 36%, plan to pay off debt with the funds, and 30% plan to use it to catch up on their monthly bills.
Less than half, 42%, plan to put at least some of their refund into savings.
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“Inflation has slowed, but higher prices continue to impact consumers’ financial wellness,” said Kate Long, consumer financial wellness advocate at Assurance IQ.
Notably, the survey found that 29% of consumers are considering using their tax refunds to pay for insurance as premiums continue to rise – including nearly half (48%) of Gen Z.
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“Lower income households who live paycheck to paycheck have been hit hard by inflation,” Long said. “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.”
Around 23% of consumers expecting a refund plan to use their tax refund on something “fun,” the survey found, while 19% plan to invest it and 3% plan to donate it. Around 12% are undecided on how they will spend it.
FOX Business’ Megan Henney contributed to this report.