Most Americans Would Rather Get a Tax Refund Than a Bigger Paycheck
It’s the height of tax season in America, which means that millions of workers are getting ready for their annual refund check. Last year, Americans completed nearly 156 million tax returns, resulting in an average refund of $2,869.
According to a new survey from Barclays US Consumer Bank and Kiplinger’s Personal Finance magazine, 63% of Americans would rather receive a tax refund than a bigger paycheck. In other words, Americans prefer receiving a lump sum of money once a year, rather than small disbursements throughout the year.
When asked why they preferred a refund over increased pay, 31% of refund recipients said they were more motivated to save money because of their tax check. However, 63% of respondents said they simply liked getting a refund back.
Last year, 67% of Americans saved some or all of their tax refund. One in four people who received a refund used the money to pay off credit card bills, including 30% of women and only 17% of men. Just 16% of respondents used their refunds for a big purchase, such as a gift or vacation.
For many, tax season is an opportunity to pay off outstanding bills from the holidays. A study from Jackson Hewitt found that 41% of consumers use tax refunds to pay for holiday debt. This was even higher for Gen Z adults, with 63% planning to use their taxes for debt repayment.