Most Americans don't plan to hold onto their tax returns for very long. Thirty-five percent of respondents in a new survey say they plan to spend all or part of their tax refunds this year.
Overall, 85 percent of Americans expect to get a tax return this year, researchers found. Projections from the Internal Revenue Service (IRS) estimate the average return to be $2,803. Despite those spending plans, a majority of Americans do not calculate their refunds as a part of their annual budgets.
Among those looking to spend their returns, 30 percent plan to spend them on everyday expenses and necessities, while 23 percent plan to put the money toward vacations. Other popular purchases include clothing and electronics. Additionally, 22 percent of respondents say they plan to pay down debt with their tax refunds, while smaller numbers of people plan to save and invest their refunds.
That spending comes in the midst of declining take-home pay after Congress eliminated the payroll tax holiday. Thirty percent of people in the survey say they did not know that their take-home pay had declined. At the same time, 44 percent of respondents say they don't plan to change their spending habits in response to the pay declines.