So far in 2024, income tax returns filed to the IRS are running behind last year’s pace, though the average refund is slightly higher. As of Feb. 16, 2024, total returns received are down 5.7% from the previous year and returns processed are down 6%, the IRS reported. The total number of refunds and total amount refunded are both down by nearly one-quarter. However, the average refund amount has risen 2.1% to $3,207.
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The IRS expects nearly 129 million individual tax returns by the April 15 deadline — and about three-quarters of filers are expected to get a refund, per USA Today. Of those who are getting a refund, 42% plan to save some or all of their it, according to a new survey from Assurance IQ.
The online survey of 1,165 U.S. adults, conducted in late January, also found that more than one-third (36%) of respondents plan to use their refunds to pay off debt. Here are some other highlights:
- 30% of respondents plan to use their refunds to catch up on monthly bills.
- 29% are considering paying for insurance premiums.
- 23% plan to “do something “fun.”
- 19% plan to invest it.
- 12% are undecided.
- 3% plan to donate it.
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Young Americans Need Tax Refund Cash For Insurance
According to Assurance IQ, younger Americans are the most likely to use their refunds to cover insurance premiums. Nearly half (48%) of Gen Z said they might use it for insurance, while 33% of millennials plan to do the same. That compares to 27% of Gen X and 17% of baby boomers.
“Higher premiums likely hit the younger generation harder, since they are just starting their financial journey,” Assurance IQ consumer financial wellness advocate Kate Long wrote in a Feb. 8 blog. “Additionally, auto insurance companies tend to view young, less experienced drivers as riskier and price policies accordingly.”
The Assurance IQ survey came to slightly different conclusions than a similar survey recently conducted by GOBankingRates. According to the GBR survey, these were the top ways respondents planned to use their 2024 tax refunds:
- Savings: More than 25% of respondents.
- Pay off debt: 15%
- Pay bills: 13%
- Major purchase: 4%
- Invest it: 4%
- Vacation: 2%
The GBR survey also found that more than half of respondents (52%) expect their refund to be about the same this year as last year, with 18% expecting a bigger refund and 30% expecting a smaller one.
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This article originally appeared on GOBankingRates.com: Nearly 75% of Americans Expect a Tax Refund — What Will They Spend it On?
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