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Tax refund recipients say they’ll save, pay off debt

March 5, 2017

Most people get federal tax refunds. And for a lot of them, it's a substantial amount.

Through February, the Internal Revenue Service says it issued more than 41 million refunds with the average check exceeding $3,000.

1040 and Refund Check

So what are folks doing with that money?

A couple of recent surveys found they are being practical.

Savings and debt reduction: GoBankingRates.com found that most Americans will use their tax refund money to add to their savings and pay down debt.

Individuals' personal financial situations, however, determine which of those two refund options they choose first.

Folks making less than $50,000 are more likely to use their tax refund to pay off debt, according to GoBankingRates.

Those in the $50,000 to $149,999 income range, however, tend to put their tax refunds into savings.

And the survey found that age matters, too.

GoBankingRates found that younger millennials — those ages 18 to 24 — are the most likely to save their tax refunds. More than half, 54 percent, said they plan to stash their tax cash this year into a savings vehicle.

GoBankingRates 2017 refund survey overall results graphic

As for paying down debt, the survey found that slightly older millennials — ages 25 to 34 — are the most likely to use tax refunds to whittle down what they owe. Gen Xers — individuals ages 35 to 54 — are the second most likely to pay down what they owe with the money they get back from the IRS.

And it's older refund recipients, taxpayers age 65 or older, who are more likely to use a refund to splurge. Hey, you can't take it with you!

More paying down debt: The National Retail Federation's (NRF) tax refund poll showed similar results.

The retail trade association's survey, conducted by Prosper Insights & Analytics, found that 48 percent of tax refund recipients plan to put the money into savings, second only to last year's record high 49.2 percent.

In addition, NRF/Prosper found that 35.5 percent will use their tax refund money to pay down debt, up from 34.9 percent last year but far below the peak of 48 percent seen in 2009.

NRF tax refund use 2017 survey overall results

Do your refund plans follow the GoBankingRates and NRF poll findings?

Both surveys obviously contain a lot of figures, but the one that gets this week's By the Numbers honor is the $3,071 average federal tax refund issued so far this year.

That's a welcome amount regardless of how you choose to use it. 

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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