According to the National Retail Federation’s 2011 Tax Returns Consumer Intentions and Actions Survey, many Americans are now keen to use their tax refunds to treat themselves or their families to a major purchase. 13.2% of Americans will spend their refund on a big ticket item, such as a new television or furniture up from 12.5% last year.
But with the economy also serving as a reminder that it’s best to be financially prepared for the worst, 42.1% of people will put their refunds away for a rainy day vs. 40.3% in 2010. 66.2% of tax payers are expecting a refund this year, up from 65.5% last year.
Matthew Shay, NRF President and CEO, says “Despite the difficult unemployment situation… Americans receiving a tax refund this year seem eager to plough this money back into the economy… NRF is becoming more bullish about the economic recovery.”
Other ways consumers will use their refunds include:
- 41.9% of consumers plan to pay down debt.
- 11.9% planning a vacation
- 29.7% paying for everyday expenses
This year, 57.6% of U.S. taxpayers will file their taxes online, up from just 50.1% in 2007:
- 35.2% will prepare their taxes using computer software
- 21.5% will use an accountant
- 19.3% will use a tax preparation service
- 10.9% will have a friend, spouse or other relative prepare their taxes for them
- 13.2% will prepare their taxes by hand
According to the survey, 63.9% of Americans will have filed their taxes by the end of February, meaning that many tax returns have already been received or are on the way. An additional 21.1% will file in March and 15.0% will wait until the last minute and file in April.
Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch, notes that “Many Americans have spent the last few years paying down debt with their tax refunds, but… others are looking to the future… by putting their ‘free money’ in a savings account… ”
For more information from the NRF and BIGresearch, please visit here.