8 Ways Americans Want to Use Their Tax Refunds in 2024

Do you have big dreams for your tax refund? As of March 29, 2024, the average tax refund for 2024 was $3,050, according to IRS data. There are many financial goals you could invest that money into, including emergency savings, paying off debt, or opening CDs. However, many Americans view their tax refund as a “must-have” rather than a “nice-to-have” money.

Many Americans expect to receive a big tax refund so they can put that money toward a wide range of everyday expenses and essential needs, according to a new Trustpilot survey conducted by Attest. Tax refunds are a financial lifeline for many American households. If you’re worried you might not get a big tax refund in 2024, you’re not alone.

Let’s take a look at what Americans told Trustpilot about their hopes and dreams for how they will use their 2024 tax refund.

Most Americans’ finances are affected by tax refunds.

A Trustpilot survey (conducted March 28-29, 2024) found that tax refunds are a big reason for excitement and concern among Americans. Only 13% of Americans say their 2024 tax filing results or the size of their tax refund will be “not affected at all.”

Most people are already planning in advance how they will spend, save, and invest their tax refund. So, if you don’t get that money as expected, it will be a huge blow. A total of 19% of Americans who have not yet filed their taxes said they were worried about owing money to the IRS, and 7% said they could miss out on household goods payments due to an additional tax bill.

Key Impacts of Tax Refunds on Your Personal Finances (The Good and the Bad)

The Trustpilot survey also asked Americans how filing their taxes will affect their financial decisions. Some people may be more likely to spend money on certain things or less likely to afford certain bills depending on the size of their tax refund.

Here are the top eight effects the size of your tax refund can have on your personal finances. That said, here are the financial decisions Americans consider based on their tax return refund amount:

1. Groceries and Household Items (35%)
2. Travel/Vacation (31%)
3. eat out (31%)
4. Late payment of other bills (credit cards, loans, etc.) (26%)
5. Gas and Transportation (25%)
6. Streaming services and subscriptions (18%)
7. Postponing medical/medical appointments (15%)
8. Childcare/Childcare (7%)

It’s unfortunate that so many Americans make decisions about whether to buy groceries or household goods based on their tax refund. While some Americans are hoping to use their tax refunds for enjoyable expenses like vacations or eating out, others are considering delaying health care because their refunds are insufficient. Others are counting on their tax refunds to pay for gas or child care.

Keep in mind that if you end up owing money to the IRS, you don’t have to go without groceries. If you are experiencing financial hardship, you can ask the IRS to accept an “offer in compromise.” This is a special deal that allows you to settle your debt by paying less than the taxes you owe. You will need to apply for an Offer in Compromise, and you may qualify depending on how much tax debt you have and other financial details.

conclusion

Receiving a large tax refund may feel like a windfall of “free money,” but many Americans rely on this one-time injection of cash to pay everyday expenses. If you have big plans for your tax refund and don’t need the money to buy household items or groceries, it may be a good idea to put some of your tax refund cash into a savings account. And if you’re having trouble paying your taxes, don’t go without essentials. Keep in mind that the IRS offers payment plans and will accept “offers in compromise” if you qualify.

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