Study: 79% of Taxpayers Expect a Refund and Already Know How They’ll Spend It

A new survey of 2,000 U.S. taxpayers, commissioned by TaxSlayer and conducted by Talker Research, illustrates the mixed emotions and financial realities surrounding tax season for many Americans.

Of note, 79% of those surveyed believe they’ll be getting a refund this year, and one-third say they plan out how they’ll spend their tax refund roughly six months in advance.

Keep reading to learn what America’s taxpayers expect to spend their refunds on this year and why prior tax years may influence when they file their returns in 2025.

Most Americans plan to spend their tax refund on necessities

Most Americans prioritize necessities when deciding how to allocate their tax refunds – in fact, only 8% of those surveyed plan to indulge in luxuries such as new clothes, entertainment, and phones. The remaining data, meanwhile, reflects a clear trend: tax refunds are a critical financial lifeline for meeting essential needs. 

Among these essentials, bills like rent, groceries, and paying down credit card debt rank highest. Notably, over half of respondents who said they plan to use their refunds for credit card debt specifically aim to pay down balances racked up during the holiday season. 

Respondents were most likely to spend their refund on:

Rent (52%)

Groceries (44%)

Credit card debt (37%)

Women (80%) are more likely than men (73%) to spend their refunds on necessities. Conversely, men are twice as likely as women to splurge on luxuries (12% versus 6%) or invest their refunds (32% compared to 11%). Men are also more likely than women to use a tax refund to purchase new appliances. 

Age also appears to play a role in determining how groups spend their refunds. For example, a higher percentage of Gen Z respondents prioritize luxuries and childcare costs than other groups. Meanwhile, Millennials are more likely to spend refund money on entertainment and designer items.

How men and women plan to spend their refunds

Most early filers are motivated by getting their refund sooner

Filing taxes early is a popular choice, with 43% of respondents planning to submit their returns ahead of the deadline. The number one motivator people cite for filing early is that they want to get their refund sooner. That’s followed closely by the desire to avoid the stress of last-minute filing. Nearly 1 in 4 respondents who consider themselves early filers say they’re motivated to file early because they did so last year.  

A deeper look at the motivations that drive each generation to file early shows some clear trends. For instance, Millennials who file early rely on tax refunds as an important piece of their financial picture.

46% of Millennials report that their refund is “very important” to their budgeting plans.

46%

This is a higher percentage than any other group.

Interestingly, the Silent Generation leads in planning to file right on time, with 61% preferring to file on the deadline rather than early or late.

Half of taxpayers anticipate receiving the same refund amount as last year

When it comes to tax refunds, people stated that they expect, on average, to receive around $1,700 back from the IRS, and 51% of respondents believe they’ll receive about the same amount as last year. Interestingly, the average federal refund* in 2024 was more than $3,000.  

Reflecting on last year’s experiences, 12% of respondents reported receiving a larger-than-expected refund, but 20% recalled being disappointed by a smaller amount than anticipated. 

Generational trends also highlight varied experiences and outlooks. While most people across all age groups expect consistency in their refunds, the Silent Generation had the highest percentage (24%) of respondents who owed taxes last year. Meanwhile, Gen X stands out as the group most likely to have felt disappointed with their refunds, which may be why they have more cautious expectations this year. 

Top 3 reasons people expect a change in their refund amount this tax season:

Changes in income

Adjustments to
tax withholdings

Shifts in deductions
or credits

*Average federal refund: According to the IRS the average refund was $3,213 as of 2/23/2024. 

Methodology

For this study commissioned by TaxSlayer, Talker Research surveyed 2,000 U.S. taxpayers online from Dec. 13 to Dec. 20, 2024. Respondents were sourced from online access panels and programmatic sampling and received small incentives for their participation. Quotas and other parameters were used to ensure a representative sample. Data was not weighted. 

Quality control measures excluded incomplete, duplicate, or low-quality responses. Only cells with at least 80 respondents were analyzed, and statistical significance was calculated at the 95% level. The survey was conducted in English and reflects responses from internet users only. 

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