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
dp
March 23rd, 2011
8:01 am
Gonna probably have to spend it on my power bill after hearing about the case against Cobbs EMC’s Brown being dropped. I figure that ole Roy Barnes is gonna get Brown to pay him a 8 figure sum, which of course, us Cobb EMC ratepayers will get tagged with. Hey Roy, I thought you always claimed that you were for the consumer & the little guy…oh, yeah…right! And if anyone believes ole Roy didn’t use his Associate to intentionally get that Indictment tossed, well I guess you believe that Barry Bonds really did think he was injecting Flax Seed into his rump with that needle!
fair tax
March 23rd, 2011
8:10 am
Average refund is $3,000? That’s $250 more per month that people could have used throughout the year. Why let the governement have that money all year interest free? Adjust your withholdings.
JJ
March 23rd, 2011
8:30 am
No, I’m not going to adjust my withholdings. I like getting money back every year. I’ve learned how to live within my means. I don’t have any credit cards, and everything is paid for with cash. The only thing I finance is my mortgage.
This year, my tax refund went to a rebuilt transmission for my 13 year old car, with 173K miles on it.
Cyndi
March 23rd, 2011
8:34 am
Work 2 jobs–get back $115 from the Feds, owe $60 to the state. Leaves me with $55 after that. A tank of gas and maybe a Happy Meal at Mickey D’s. Fun times!!!
Average Joe
March 23rd, 2011
8:36 am
No refund for me. I’ll be mailing a $192 check to the IRS on 4/15. I owe the state a little money, too.
Refund Baby!
March 23rd, 2011
8:39 am
Spend spend spend! Since we have everything we need, we’re going on a vacation, eat out at restaurants every night, and buy fancy do-dads to put on our bookshelves.
jess
March 23rd, 2011
8:40 am
because i’m a multi-billionaire I’m getting fourteen million dollars in my refund. recently been thinking i want to spend my refund buying a few more politicians, if i accumulate suffucient quantity, they’ll give me everything else i want.
Piggy Bank
March 23rd, 2011
8:40 am
What refund, withholding cut on both workers to 1 and I still owe money even with a good mortgage deduction. All I do is pay taxes…
Piggy Bank
March 23rd, 2011
8:42 am
Nathan Deal pays 2K in taxes and I pay about 28k, his income was reported as about the same as my families…I must be checking the wrong boxes are something. please give us a fair tax!
Gig
March 23rd, 2011
8:46 am
Thankfully, I have no debt other than my mortgage, drive a seven-year-old car that was paid for five years ago, have good health, and live within my means. I like getting a large tax return back. Usually that money goes into my long-term savings account. I’ve been unemployed before, and it was nice knowing that I would have that money available if I needed it. However, this year, I decided to splurge, and I’m getting new granite countertops.
Standing in an 8 hour line for the iPad 2
March 23rd, 2011
8:47 am
I’m buying another iPad for my wife!
Pray
March 23rd, 2011
9:04 am
I put it all in savings to go towards purchasing a new house!
Diana
March 23rd, 2011
9:10 am
Used it to finish paying off $3,000 on energy efficient windows purchased last year. Now no more debt except mortgage. Treated ourselves to a paint job on the den and put the rest ($10,000) in our savings accounts.
N
March 23rd, 2011
9:18 am
No big refund here. The $3,000 avg amazes me but I am sure the 50% that don’t pay any taxes and thus get large refunds push that average up to that level. I’ve never seen a refund that large but my refunds usually go into savings or to pay off something.
Sure is a lot of money to loan the government but if it works for people and they feel good about it and getting the refund each year, go for it.
Mike
March 23rd, 2011
9:18 am
Use it to buy more lottery tickets in hopes of winning back what I lost when my 401k tanked!
N
March 23rd, 2011
9:20 am
Mike – Funny post. hasn’t your 401k recovered by now. Have yet to meet anyone who has come out ahead playing the lottery.
Techmom
March 23rd, 2011
9:22 am
$10,000 refund?
@PiggyBank, I’m with you. I feel like I missed the memo on how to pay so little in taxes. We pay enough to support a family of 4 ABOVE the poverty line. I’ve got to be doing something wrong (and no, we’re NOT rich by any means).
eye roll
March 23rd, 2011
9:22 am
I have always been facinated at the shear number of multi-millionaires that love to come on blogs and tell everyone how much money that they have. Now we have a multi-billionaire. WOW – Atlanta is full of wealthy folks!
No refund here, having to fork over some cash to Fed & GA. Being stuck in the land of alternative minimum really stinks. Enjoy your tax refund folks!
Typical Redneck
March 23rd, 2011
9:23 am
Jess, wealth envy?
DJ SuperStar
March 23rd, 2011
9:30 am
Got very minimum federal refund. Might be able to get a tank of gas with that. For the state refund, it paid partly for the paint job for the house I have for sale on the market. That’s it. All refund money gone!
timthebrave
March 23rd, 2011
9:37 am
Paid off all my credit card debt and went on a cruise to the bahamas
Refund Baby!
March 23rd, 2011
9:41 am
N – get a clue. Those who “don’t pay any taxes” don’t get a refund. Those who get a refund have PAID TAXES ALL YEAR LONG and just overpaid. It’s about time the ignorant common folks out there realize that tax paying doesn’t just occur this time of year – it happens every time you get a paycheck!
eye roll
March 23rd, 2011
9:47 am
@ fair tax & N
Adjusting your withholdings is a crap shoot. There are many of us that have tried for years to play that game and it doesn’t always work out they way you think. However, I am with you fair tax, I wish the government would stop it obsession with my income – that would solve my problems!
grizzybear
March 23rd, 2011
9:49 am
the fairtax is nothing but a pipe dream, so get over it. it will never have enough sponsors!
Techmom
March 23rd, 2011
9:56 am
@Refund Baby! Guess you’ve never heard of Earned Income Credit? There are plenty of people who get a big fat refund of not only all the money they have paid in (very little) but also more.
Ghost of Leona Helmsley
March 23rd, 2011
9:57 am
Only the little people pay taxes.
Shelby
March 23rd, 2011
9:57 am
Saved !0% and the rest when to Sears and Lowes for yard equipment!
David B.
March 23rd, 2011
9:58 am
Since my dentist informed me I need a crown and a root canal, look’s like he’ll be getting it instead of me getting a much needed vacation. Maybe I could do both and get it done in Mexico instead…
Peadawg
March 23rd, 2011
9:59 am
Pay of the credit card and save the rest.
andrea
March 23rd, 2011
10:00 am
Refund baby- you are not correct. People that have not paid taxes all year still gets a refund. Its called a EIC for children. Sadly, my friend has been unable to work all year do to not having a babysitter/daycare. She worked a month last year and has 2 children. Shes getting back over 4000. JUst for having children and getting foostamps. MAkes me mad, but nothing can be done. Its the Fed. GOv.
GAPeach
March 23rd, 2011
10:01 am
Half going on braces for my daughter, the other half going in the bank.
eye roll
March 23rd, 2011
10:02 am
“the fairtax is nothing but a pipe dream, so get over it. it will never have enough sponsors”
Aww, grizzybear has a nasty ‘tude toward the fair tax. Wonder why?
Refund Baby!
March 23rd, 2011
10:15 am
Andrea – your friend makes me livid – why does she have kids if she can’t afford them? Where’s the father?
Native Atlantan
March 23rd, 2011
10:19 am
Still can’t figure out how to adjust witholdings enough to not loan the Feds some money at 0% interest…and still can’t understand how some of you don’t have a problrm loaning the government your money at 0% interest…We’re getting about $5,000 back from Fed/State together. Might treat ourselves to an iPad. The bulk of it will go towards some unexpected medical bills this year and into savings.
RK
March 23rd, 2011
10:20 am
What will I do? I had it back weeks ago — why wait? It’s a new car now.
N
March 23rd, 2011
10:23 am
Andrea — Great point. I am all for helping those that need a little help to get started but having 50% of people pay no taxes at all and many of those getting huge refunds due to these credits boggles the mind. Its incentive for some to have kids and not do anything productive, probably not the best environment to raise the next generation in.
KnightInATL
March 23rd, 2011
10:26 am
Mine is going towards the purchase of a Harley Davidson Night Rod Special.
andrea
March 23rd, 2011
10:27 am
the father, he’s around. He pays her 700 a month for child support. She doesnt have to claim child support for taxes and as loing as she is under 1300 a month cash, she gets 540.00 in food stamps. Plus 4000 in EIC a year. I blame the Gov for people like her and she knows it makes me sick, but its legal and as long as the gov allows it, people will do it! THey need to put a limit on food stamps. She blames the state for her troubles, as she would put it, ” no one wants a single, black, and no degree person working for them”. She thinks there needs to be more programs for minorities and single mothers. ONce again, I’m not happy with her, but it is legal.
Moe Szyslak
March 23rd, 2011
10:27 am
My state and federal refunds only totaled about $500 but I deposited them into my checking account, which is where my income gets deposited. I use that account to pay bills and then I move the excess to a savings account each month (sometimes twice a month).
So, chances are that it will ultimately end up in savings b/c I really didn’t need it to pay bills. My income covers that pretty easily.
Also, I sometimes spend my income on fancy store bought dirt.
Molly
March 23rd, 2011
10:36 am
ummm…$500 that’s all! It’s gonna be a quick shopping spree.
hd
March 23rd, 2011
10:39 am
What refund? No interest free loans from me.
CHUCK
March 23rd, 2011
10:39 am
I had to pay 2000 …
typical Joe Blow in Atlanta
March 23rd, 2011
10:41 am
My wife wants a new BMW, so that’s what my refund will be going towards. She’s playing tennis today with some of the other ladies in the neighborhood. I’m at work.
Sam
March 23rd, 2011
10:41 am
Our tax refund was due to tuition credits. We are therefore saving to pay future tuition. No school loans or debt for us.
Refund Baby!
March 23rd, 2011
10:41 am
I had 2 single black no-degree females working for me in the kitchen of my restaurant. They did great jobs. One was promoted to front of the house. Got to start somewhere!
TnGelding
March 23rd, 2011
10:42 am
Let’s hope they’re right and we have learned a hard lesson.
Normally we don’t pay any tax or get a refund, but this year we are. I’m going to invest it on the Blackjack table and hope to own the casino in a couple of hours of divine intervention.
CHUCK
March 23rd, 2011
10:43 am
How can you get money back wthout having a job? isnt’ a refund just money that you already paid to govt that they are givng back.
EIC is just a credit.
tl
March 23rd, 2011
10:44 am
Andrea, If she’s like most, she sells or trades those food stamps too!
TnGelding
March 23rd, 2011
10:44 am
I understand your logic, but I guess you folks would rather we be paying interest to the governments of China and Japan.
Lilburngal
March 23rd, 2011
10:44 am
Had enough to get a new kitchen floor and to donate to church.
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.
Find Me - I Dare Ya
March 23rd, 2011
3:15 pm
Living off the grid and the IRS has no idea I even exist. No bank account – just a safe deposit box in my father’s name in a small town bank where all my money is along with a stronbox in the wall for keeping some on hand. I’m sure I’m doing better by not paying taxes than I would be doing if I had it in an interest bearing account. How else can you keep 40% more of your money?
TnGelding
March 23rd, 2011
3:22 pm
eye roll
March 23rd, 2011
3:06 pm
It was sincere, although a little too flippant.
We simply have to come up with a more simple, efficient way to feed the beast. The IRS can be a real headache. My apologies and condolences. Might consider hiring a tax attorney, but it probably wouldn’t save you any money. It’s really a shame.
TnGelding
March 23rd, 2011
3:25 pm
Find Me – I Dare Ya
March 23rd, 2011
3:15 pm
There are millions similar to you. That’s the one good thing about the Fair Tax. You’d have to pay your fair share. You’re one of the reasons the IRS has to have so much power it can harrass the rest of us.
Hope you were just pullng our leg.
Light
March 23rd, 2011
3:28 pm
Let God will be done thru this blog http://lightoftheearth.blogspot.com/
party time!
March 23rd, 2011
8:45 pm
I’m going to vegas with my refund and hoping to turn it into a big bundle playing blackjack and poker, all night sessions, mixed in with some hard partying with the vegas ladies the rest of the time!!!
TnGelding
March 23rd, 2011
11:02 pm
Make that castrated instead of neutered. How could I forget that?
TnGelding
March 23rd, 2011
11:07 pm
Well, we should all return our refunds to the U.S. Treasury. It needs it worse than we do!
http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm
“The Bureau of the Public Debt may accept gifts donated to the United States Government to reduce debt held by the public. Acting for the Secretary of the Treasury, Public Debt may accept a gift of:”
•Money, made only on the condition that it be used to reduce debt held by the public.
•An outstanding government obligation, made only on the condition that the obligation be retired and the redemption proceeds used to reduce debt held by the public.
•Other intangible personal property made only on the condition that the property is sold and the proceeds from the sale used to reduce the public debt.