Monday, March 25, 2013

Fewer US tax payer expect refunds this year

CNN reported that fewer Americans are expecting the financial boost of a tax refund this year.

About 1,500 adults were surveyed by American Express, 59% of respondents said they expect a refund check this year, down from 64% last year. Also, 19% expect to owe money come tax time, it was just 13% in 2012. And nearly 30% of respondents with a household income greater than $100,000 said they expect to owe the IRS this year.

The growing number of people who owe taxes is likely a sign that the economy is improving, said Will McBride, chief economist at the Tax Foundation, a nonprofit research group.

Of those who will owe money, most said they would pay with cash from their checking or savings account. But nearly 15% said they would pay with a credit card, up from 7% last year.

Of those expecting a refund, 37% plan to use it to pay down debt or bills, while 26% plan to save the money. Only 28% said they expect to spend their refund check on themselves or family, travel, home improvements or a big-ticket item.

The coveted refund checks, which averaged about $2,700 last year, should come in handy as consumers deal with smaller paychecks after a two-year payroll tax "holiday" expired this year.

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