Earlier this week the National Retail Federation (NRF) revealed that the number of Americans likely to pay off a debt with their tax refunds this year has gone down by about 4%. In 2009 it was estimated that 48% of Americans would use their tax refunds to pay off debts, but this year the number has dropped to only 44%. As this Biz Journal article explains, the main reason for the drop is that fewer US taxpayers are expecting to receive a refund this year.
According to those polled, fewer taxpayers are expecting a refund – 65.5 percent this year, compared to 68.4 percent last year.
“A little bit of ‘free money’ will go a long way for Americans this year,” said Tracy Mullin, president and CEO of the NRF. “Retailers planning special promotions over the next few months may find that shoppers are a bit more receptive to opening up their wallets than they have been for the past year.”
NRF said only 12.5 percent of those polled plan to treat themselves or their families with a major purchase with the refund, which is up from 11 percent last year. More than 40 percent plan to save it, nearly 29 percent will put it toward everyday expenses and 10 percent will use it for vacation.
Online filing is becoming more popular across the country, with more than 54 percent planning to file via Internet, compared to more than 50 in 2007.