How Middle-Class Americans Will Use Their Tax Refunds in 2023

About 60% of middle-income households anticipate a tax refund this yr, in line with a brand new survey. However how will they spend that windfall?

Not too long ago, monetary companies agency Primerica requested middle-income households within the U.S. about their funds. In the course of the course of, Primerica discovered how the almost 1,500 adults surveyed anticipate to spend their tax refund.

For the aim of the survey, the agency outlined middle-income households as these with annual family incomes of $30,000 to $100,000.

Following are this group’s most typical solutions relating to their meant makes use of for his or her federal earnings tax refunds.

Many anticipate smaller refunds

Within the survey, the biggest share of respondents — 36% — stated they anticipate smaller refunds this yr than they’ve acquired prior to now.

That shouldn’t be an enormous shock. Even the IRS has warned that refunds are prone to shrink a bit this yr.

Some elements which are lowering refunds embody the truth that pandemic tax breaks are actually over, and fewer persons are qualifying for the earned earnings tax credit score.

For extra, see “5 Causes Your Tax Refund Would possibly Be Smaller This Yr.”

Moreover, 33% of respondents within the survey anticipate a refund just like what they received final yr, and 24% anticipate a bigger refund this yr than in 2022.

1. Pay payments

Survey respondents who stated they plan to do that with their tax refund: 37%

Rising costs have left Individuals struggling simply to make ends meet. So, as a substitute of spending a tax refund on an unique trip or another enjoyable splurge, extra persons are resigned to easily utilizing the cash to pay the payments.

Should you need assistance staying afloat as costs rise, try the “10 Positive-Hearth Methods to Beat Inflation.”

2. Pay down debt

Survey respondents who stated they plan to do that with their tax refund: 34%

With a doable recession looming, paying down debt is a brilliant technique to put together for what may very well be a gathering storm.

For extra on tips on how to get out of the purple, try “5 Issues You Have to Know About Paying Off Debt This Yr.”

3. Add to financial savings

Survey respondents who stated they plan to do that with their tax refund: 33%

It’s heartening that regardless of in the present day’s powerful financial local weather, one-third of survey respondents nonetheless really feel their steadiness sheet is robust sufficient that they’ll afford to place extra money into financial savings.