After two years of paying down debt and skipping family vacations, many Americans plan to cautiously start spending their tax refunds once again. According to NRF’s 2010 Tax Returns Consumer Intentions and Actions Survey, conducted by BIGresearch, 43.9% of Americans expecting a refund will pay down debt, fewer than the 48.0% in 2009. However, only 65.5% of tax payers are expecting a refund, down from 68.4% last year.
According to the survey, 12.5% of people expecting a refund plan to treat themselves or their families to a major purchase such as a new television, furniture or car, up from 11.0% last year. Others will stash their refund away in savings (40.3%), put it towards everyday expenses (28.8%) or go on vacation (10.0%).
“A little bit of ‘free money’ will go a long way for Americans this year,” said Tracy Mullin, President and CEO, 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.”
As the internet becomes more of a mainstay in homes across the country, the number of people who file their taxes online continues to increase. This year, 54.4% of U.S. taxpayers will file their taxes online, up from 50.1% in 2007. Additionally, one-third (33.6%) of consumers will prepare their taxes using computer software, 23.5% will use an accountant, 17.6% will use a tax preparation service, 11.8% will have a friend, spouse or other relative prepare their taxes for them and will prepare their taxes by hand.
“After spending the last year paying down debt or building up a nest egg, Americans are relishing the idea of spending their tax returns,” said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. “Consumers focused solely on essential purchases during this economic downturn, and many are ready to treat themselves to something nice for a change.”
According to the survey, 60.6% of Americans filed their taxes by the end of February, meaning that many tax returns have already been received or are on the way. An additional 24.4% will file in March and 15.0% will wait until the last minute and file in April.
SOURCE: National Retail Federation, 3/2/10