The bad news: tax returns are due in a few days (Monday, April 18, to be precise). The good news: fewer workers plan to use their tax refunds to pay off bills and more plan to put the money into savings, reflecting a more stable economy. According to a new CareerBuilder survey, 46% said they plan to use their tax refunds to pay off bills, down from 56% last year. In addition, more than one-third (36%) of workers report they will use their tax refund to augment their savings accounts, up from 34% who said the same last year. The annual CareerBuilder survey was conducted among more than 3,900 workers.
Workers may be feeling a little more fiscally secure, because fewer are living paycheck to paycheck. While more than six-in-ten (61%) said they currently live paycheck to paycheck, this is down from 77% who said the same in a study conducted between May 18 and June 3, 2010. In addition, 79% of workers said they haven’t reduced their 401 (k) accounts or personal savings in the last year.
“Even though fewer workers are living paycheck to paycheck and are saving more, workers’ wallets are still feeling the strain of the past few years,” said Rosemary Haefner, vice president of human resources for CareerBuilder. “As the economy gradually rebounds and strengthens, workers are gaining confidence. We’re seeing this already as more are investing in their futures and preparing for challenges down the road.”
While the majority of workers will use their tax refunds to put into savings or pay off bills, others said they will use their refunds for the following:
- Make home improvements.
- Go on vacation.
- Pay back money they owe to people.
- Invest it.
- Buy a car.
Workers also shared that their tax refunds will be put toward a variety of other expenditures, including:
- Pay for a wedding.
- Donate to charity.
- Schedule doctor visits.
- Pay down mortgage.
- Buy a new computer.
- Pay for college.
For those of you curious about the IRS extension this year, here’s the explanation (straight from the IRS):
Taxpayers will have until Monday, April 18 to file their 2010 tax returns and pay any tax due because Emancipation Day, a holiday observed in the District of Columbia, falls this year on Friday, April 15. By law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have three extra days to file this year. Taxpayers requesting an extension will have until October 17 to file their 2010 tax returns.