Saving, Paying Debt among the Top Uses for Tax Refunds this Year, Mirroring How Americans Spent Their Refunds in Past Years

New York, NY - One in four (26%) U.S. adults say that they plan to save all or part of their tax refund this year, while about the same proportion plan to use it to pay debt (25%) according to a new online survey of over 1,000 adults conducted by Ipsos Public Affairs on behalf of CarMax. About one in six (16%) plan to use it on everyday expenses (such as groceries, bills, or gas), one in ten for travel (11%) or home improvements (9%), and one in twenty towards a large purchase, such as a car or a house (6%). Just under one in ten say they will use it for something else (8%), or are unsure (8%) of how they will spend it. About three in ten (29%) are not expecting a refund this year.

• Those aged 18 to 34 are more likely to be expecting a refund this year (80% vs. 71% of those aged 35-54 and just 62% of those 55 and older). With a greater portion of younger adults expecting a tax refund, they are also more likely to use it for a variety of purposes, including saving it (34%), paying debt (35%), putting it toward everyday expenses (23%), and using it toward a large purchase such as a car or house (10%).
• Married adults are less likely to say that they plan to save all or part of their tax refund (24% vs. 29% of those who are unmarried), and are more likely to say that they plan to use it for travel (14% vs. 7%, respectively) or for home improvements (12% vs. 4%).

Plans for spending this year's tax refund are similar to how respondents say that they have used all or part of their tax refund in the past: roughly four in ten say they have paid debt (44%), saved it (40%) or used it on everyday expenses, such as groceries, bills or gas (38%). One in five say they have used it for travel (23%) or home improvements (21%), while one in seven (14%) have used it toward a large purchase such as a car or house, or toward something else (14%). Just one in twenty (4%) are unsure of how they have spent it in the past, and one in eight (12%) have never received a tax refund.

• Married adults are more likely to say that they have used their tax refund for travel (26% vs. 18% of unmarried adults) or for home improvements (26% vs. 15%). At the same time, they are also less likely to say that they have used it toward everyday expenses (35% vs. 42%).
• Those aged 18-34 and those aged 35-54 are both more likely to say that they have used it on everyday expenses, compared to those aged 55 and over (43% and 39% vs. 32%, respectively).
• When it comes to putting their refund toward a large purchase like a home or a car, parents twice as likely to say they've done so than are adults without children in their household (23% vs. 11%).

Among those who are expecting a refund, 17% say that they are likely to put their tax refund toward the purchase of a car this year, including about one in twenty (5%) who say that they are very likely to do so, and 12% who are somewhat likely to do so. Conversely, 83% say that they are not too (15%) or not at all (68%) likely to do so.

• Those under 35 (29%), parents (26%), residents of the South (22%), and men (21%) are among those mostly likely to say that they may put their tax refund toward the purchase of a car.

Though many have plans for how they plan to use their refund, few spend their refund before they actually have it in hand. Less than one in ten (7%) say that they have ever spent their tax refund before they received it, compared to over eight in ten (84%) who have not. One in ten (9%) say that they have never received a tax refund.

• Those most likely to have spent their tax refund prior to receiving it include those with college degrees (9% vs. 6% of those without) and those aged 35-54 (11% vs. 5% of both older and younger adults).

When it comes to their tax prep style, the majority of U.S. adults file on time: over four in ten (45%) say they have everything in by February, while just slightly fewer (40%) say that they are a "March kind of person." One in ten (10%) report that they tend to wait until the last minute and file on April 15th, while 5% would characterize their style as "Can you say extension?"

• At least eight in ten adults across demographic groups say that they typically have their tax return filed in advance of the deadline (in February or March), with parents (92%), Midwesterners (89%), and those under 55 (88%) being among the most likely to say so.
• Those more likely to say they file on April 15 include those ages 55 and older (15%), Northeasterners (14%) and Westerners (12%), and those without children in the household (10%).
• Men are more likely to characterize their style as needing an extension (7% vs. 4% of women), as are unmarried adults (7% vs. 3%), those with household incomes under $50,000 (8% vs. 3% of those with incomes of $50,000 or over), and those without children in the household (6% vs. 2%).

These are some of the findings of Ipsos polls conducted March 3-4, 2014. For the survey, a national sample of 1,010 adults aged 18 and older from Ipsos' U.S. online panel was interviewed online. Weighting was then employed to balance demographics and ensure that the sample's composition reflects that of the U.S. adult population according to Census data and to provide results intended to approximate the sample universe. A survey with an unweighted probability sample of 1,010 and a 100% response rate would have an estimated margin of error of +/- 3.1 percentage points 19 times out of 20 of what the results would have been had the entire adult population of adults aged 18 and older in the United States had been polled. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

For more information on this news release please contact:

Rebecca Sizelove Associate Vice President Ipsos Public Affairs 212.584.9253 [email protected]

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