Few taxpayers plan to splurge with refunds

Tax time is bringing hope for refunds for about two-thirds of taxpayers this year.

Few taxpayers receiving refunds plan to splurge with their money.

Instead, half plan to use it to pay down debt, according to a market research survey sponsored by the National Retail Federation (NRF). Another 39 percent plan to put it into savings. The rest plan to use their refunds to pay ordinary expenses, take a vacation or make a major purchase.

“I think it’s more important to get those debts down,” said Rufus Jackson, an Amtrak mechanic who works at Union Station. He expects to get a $1,200 tax refund.

“It takes money to have fun,” he said.

Other taxpayers passing through Union Station yesterday expressed similar feelings.

David Reap, a marketer for real estate development companies, said he hopes the $5,000 refund he is awaiting will help pay the last of his student loans, credit card debt and car loan.

“I’m debt-free after tax time,” said Mr. Reap, an Orlando, Fla., resident visiting the District for a business trip. “I’m not going into debt again.”

The average refund as of Friday was $2,232, up from $2,113 at the same time a year earlier, the Internal Revenue Service reported.

This is expected to drop as taxpayers earning the smallest refunds or who must pay an IRS bill put off completing their returns until closer to the April 15 deadline.

On March 4, the average refund was $2,371, up from $2,182 at the same time a year earlier.

The refunds also bring hope to retailers, some of whom are offering sales to entice taxpayers who will use refunds to make purchases.

“Throughout the month of April, we expect retailers to offer a variety of promotions geared to encourage consumers to spend part of their refunds on new electronics, clothing and cars,” said Tracy Mullin, NRF chief executive officer.

Anyone wondering about the status of their tax refund can check for an update on the IRS home page at www.IRS.gov by clicking on a feature called “Where’s My Refund?”

Taxpayers who expect a refund should “choose direct deposit,” said Anthony Burke, IRS spokesman. “It will get to you a week sooner.”

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