Are you expecting a tax refund this year? Or are you are not holding your breath? A new survey by American Express found that 59 percent of respondents said they expect a refund this year, down from 64 percent from the same time a year ago.
The same poll discovered that 19 percent say they will owe the Internal Revenue Service (IRS) money, while close to 30 percent of households earning more than $100,000 believe they will have to pay the IRS.
According to the study, more than one-third (37 percent) of those expecting a refund will use the money to pay down their debt. Meanwhile, more than one-quarter (26 percent) will save the money and 28 percent will spend the money on themselves, such as a trip, home improvements or a big-ticket item.
For those expecting to pay, half of the survey participants will pay out of their checking, while close to one-quarter (24 percent) will take the money out of their savings account. Eleven percent will have to setup a payment plan, 14 percent will use their credit card, four percent will borrow from a friend or relative, seven percent will use their credit card rewards or bonuses and 11 percent have no idea how they will pay the amount to the IRS.
The average tax refund is about $2,700 and many financial experts see this as a positive, especially since the average worker had to deal with a two percent payroll tax hike on Jan. 1.