Will you save or spend your tax refund?
What are you going to do with your tax refund?
Forty-two percent of those surveyed said they will save at least part of their refund, which is expected to average about $3,000, writes Palm Beach Post reporter Laura Green.
And of those who are spending, the biggest segments plan to pay off debt (41.9 percent) or cover everyday expenses (29.7 percent), Green reports, citing a study by the National Retail Federation.
“The bad news is the recession has greatly affected people,” MassMutual financial adviser Alfred Hovis told Green. “The good news is it’s woken up a lot of folks to understanding that they have to be more self-reliant.”
Financial advisers are starting to believe that the trend of the past few years, when more Americans plowed refunds into a retirement or an emergency account, could signal a more lasting shift, Green writes.
Are they right or wrong? What do you plan to do and why?
- Henry Unger, The Biz Beat
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107 comments Add your comment
Johnny
March 23rd, 2011
10:47 am
With a little over 3K back we save ours for a quick trip vacation to the panhandle in late spring $500 or so, Save around $800 for car tags and property taxes for the end of the year .. around $800 for christmas and split the rest in savings for hard times/emergencies and the other half for house projects …
jcatl
March 23rd, 2011
10:48 am
Hookers and blow.
OldManDownTheRoad
March 23rd, 2011
10:51 am
What’s a blow?
Thrifty Mama
March 23rd, 2011
10:54 am
We’re getting a little more than that back this year. Actually it’s sitting in the savings account – part of it is paying for a short getaway to PCB this summer and a new small gas grill. The rest – being saved to go towards medical bills that are coming because our health insurance has such a high deductible.
TnGelding
March 23rd, 2011
10:55 am
Blow? Drugs, especially cocaine?
Nanny
March 23rd, 2011
10:59 am
Refund Baby: Guess again! Years ago, I ALWAYS got back more of a refund than I paid in taxes, because I qualified for the Earned Income Credit. It seemed unfair, but at the time, I needed it so I took it. Me and my 4 little children used to take a vacation every year with my “refund!” I wonder how many others out there are getting a refund on taxes that they never even paid.
TinaTeach
March 23rd, 2011
11:01 am
Used half to pay for termite treatment and the other half will pay for car tags in July.
ramblwrk68
March 23rd, 2011
11:04 am
Using the State refund to help pay the Federal due on 4/15. I’m also waiting until the last minute (Oct. 15th) to file Federal!
Mom to Two
March 23rd, 2011
11:06 am
Taking the kids on the Disney Dream boat! Been so long since we’ve been able to take a vacation. Can’t wait!
N
March 23rd, 2011
11:06 am
That average refund of $3k invested for 25 years at 7% would return $202,000. Not bad for those who say they cannot afford to put anything into retirement.
pj
March 23rd, 2011
11:08 am
Was finally able to get my daughter the braces she’s needed for several years.
Dan
March 23rd, 2011
11:09 am
I used mine to pay off the last of my wreckless credit card spending (built up during college) that I’ve been paying on for the 3 years since I’ve been graduated from college. There was about $100 left so I used it towards my car tags.
My fiancee used hers (EIC – catastrophic illness and out of work per doctor orders) for two things. Half went to purchase her wedding dress and the other half is going to our part of the wedding cost.
Fletch
March 23rd, 2011
11:18 am
Charlie Sheen style party. Tax Winning.
bb3
March 23rd, 2011
11:18 am
Have to buy two central heating/AC units for my house this spring – Ouch! Paperwork is with my accountant. If I get a refund and have anything left after the AC, will save for the next emergency.
ALH
March 23rd, 2011
11:21 am
“no one wants a single, black, and no degree person working for them”
Those are all excuses. The entitlement folks need to wake up and get moving (working), taxpayers are raging mad at paying for all this abuse of the system.
H and R
March 23rd, 2011
11:23 am
Y’all are just blowing smoke here. The Earned Income Credit is exactly what it says: a “credit” or reuduction in the taxes you OWE based on the “income” that you “earned” from WORKING. It is not a handout of free money to non-working baby mammas on the welfare dole. Do a little research before you mislead any more simpletons.
Kris
March 23rd, 2011
11:24 am
My unemployed neighbor, who also gets food stamps, got $1,300 back. FOR DOING NOTHING except mooching off the goverment teet……
brokebottom45
March 23rd, 2011
11:26 am
I followed my usual procedure. My wife and I made contributions to our IRAs which raised our tax return. The return was then put in our savings which is where our contributions originated in the first place. We broke even on this and had some left over to spend. It was almost like the government was paying us to save on our IRAs.
tl
March 23rd, 2011
11:30 am
H&R, it may be named a credit but it comes back to you in cash. My friends hubby only paid in 1,300 in fed but they got back 5,300. You need to know your facts too.
Hindu Elvis Pimp
March 23rd, 2011
11:33 am
Gonna spend it on some hookers and weed.
TheRabbit-MF
March 23rd, 2011
11:34 am
I’ll spend part of mine on dinner at Morton’s in Buckhead:
Entree: Cajun Ribeye, medium
Side: Lyonnaise Potatoes
To drink: Pinot Nior, Ponzi – Willamette
Dessert: Creme Brulee
chummy
March 23rd, 2011
11:37 am
If the Republicans have their way, they will get rid of the tax deduction for mortgage interest. Even more reason to get EXCITED!!!
jill
March 23rd, 2011
11:38 am
I’ve gotten about $5,000 back, and I’m blowing it all on a trip to Spain and Morocco. Gotta spend it all before the world ends in 2012!
ddb
March 23rd, 2011
11:40 am
Paid off $3100 in debt, put the rest in the bank. I’m Debt Free!!!!! Thanks Dave Ramsey!
Keith Thomas
March 23rd, 2011
11:47 am
PINK PONY
N
March 23rd, 2011
11:48 am
A credit is subtracted directly from your federal income tax on a dollar-for-dollar basis. credit saves you more money than a deduction, which you subtract from your income before you calculate your tax and which yields much less than dollar-for-dollar savings.
Tyler
March 23rd, 2011
11:56 am
If you get a big tax refund every year and you haven’t MAXED out your 401(k) contributions (at least to the point beyond which your company matches – if it does) OR set that money aside in a traditional IRA, not only are you giving the government an interest-free loan on money YOU could be earning interest on, but you are actually paying MORE in federal income tax. If you are getting a $3000 tax refund, you are giving the IRS (assuming you are in a 28% tax bracket) an ADDITIONAL $840 in taxes. Wake up, you rubes.
Tyler
March 23rd, 2011
11:58 am
Hey Nanny, you’re a parasite.
MJ
March 23rd, 2011
12:01 pm
I used mine to pay off some debt, get some important items,and I am planning to save some of it.
Taxpaying fool
March 23rd, 2011
12:02 pm
Refund? What are refund? Are you kidding me????
Nanny
March 23rd, 2011
12:03 pm
Hey, Tyler: I didn’t ask for it. It’s our unfair federal government at work!
HilltopBubba
March 23rd, 2011
12:05 pm
I’m takin’ that money I got comin’ and I’m a goin’ to town to find me a good-lookin’, hard-workin’ woman who ‘preciates what I got and takin’ ‘er back to the hills to get hitched. Then we’ll have lots a babies and get that there income credit stuff ever’one’s talkin’ ’bout.
nativeson71
March 23rd, 2011
12:20 pm
Every year I put my refund towards the principal of my home.
Bill
March 23rd, 2011
12:22 pm
I am going to drive down the street to the brick buildings that all look the same. I will then go ahead and give it to the non-whites because that is what my president wants me to do.
Bill
March 23rd, 2011
12:25 pm
Man did it get quiet in here, ping
Crystal
March 23rd, 2011
12:57 pm
We got back $3200 and put it in our savings account. We plan on using it as a downpayment for a new house.
Darwin
March 23rd, 2011
12:58 pm
I generally do not get refunds. I even stop itemizing last year as my mortgage interest has gotten too low. So, I owe both Federal and State taxes. If you follow the financial advisors, they tell you a tax refund means you’re having too much taken out of your paycheck. You should withhold less, and actually save or invest it at a rate of return. It’s rather simple you know.
TMP
March 23rd, 2011
1:30 pm
It sounds like some people on here just believe that those of us who receive a large refund are over-paying our taxes. Obviously you have failed to realize that if you pay students loans, have a business, have children, own real estate, donate money, etc. etc., then you will have a large refund.
TMP
March 23rd, 2011
1:34 pm
Also, when my accountant started my taxes, it showed that I paid JUST ENOUGH in taxes so that I wouldn’t receive a refund. However, with my business expenses, I was able to get back around $2000
Broke&Broke
March 23rd, 2011
1:46 pm
My fed refund going to pay the Chap 7 filing fee and the attorneys. The state refund for new tires on the car and hopefully something will be left over. Keep your fingers crossed!
FedUp
March 23rd, 2011
1:46 pm
Well, I hope you enjoy your refunds, while I had to pay MORE! And to think Obama wanted more! I guess 60% of my income isn’t enough.
FedUp
March 23rd, 2011
1:49 pm
Ever heard of AMT? That’s what they hit you with when you have an OK income and too many deductions. Kinda a tax on the deductions if you like. Not anything illegal either. Home interests, 3 dependants, charitible contributions to a CHURCH, etc..
I guess I won’t give this year so I won’t have that tax next year. Cost me another 2500 in taxes
resno2
March 23rd, 2011
2:02 pm
$20. It’s been on our fridge for three weeks while we figure out if the two of us get to go to Golden Corral for dinner, or if we take the kids out for ice cream.
HoneyBun
March 23rd, 2011
2:04 pm
I’m spending my entire refund on RING POPS!
TnGelding
March 23rd, 2011
2:28 pm
N
March 23rd, 2011
11:06 am
7%? I think we’re getting closer to 1% at the present. But it looked good.
eye roll
March 23rd, 2011
2:37 pm
@ FedUp
I slightly mentioned AMT this morning, but I really don’t think most have a clue with what we have to deal with. Being labeled alternative minimum by the IRS is no fun!
TnGelding
March 23rd, 2011
2:38 pm
Well, the Gelding got neutered….again. Instead of $700 we’re only getting back $7. So much for that gambling junket. Ended up having to pay income tax on Social Security benefits, so we paid our “fair share” for the first time in years. Why do we allow them to perpetrate such a costly, complex maze on us?
TnGelding
March 23rd, 2011
2:40 pm
You folks that have to pay the AMT are true patriots. Congratulations on your success and thanks for your confiscatory contributions.
eye roll
March 23rd, 2011
3:06 pm
@ TnGelding
I really don’t know how to take that … your welcome?
2010 will go down in history as the worst for me. Lost a job and took severence (not interested in moving to Chicago). Dared to find a another, slightly better, job right away. Took a month off in between. Now the IRS wants a total of about $9k because I took the effort and had the smarts to find another job so quickly. I don’t know wheather to laugh or cry.
Feel far from rich and live well below our means, just trying to be responsible for our “golden” years.
Chris
March 23rd, 2011
3:08 pm
No return. And that was the plan.