What Tax Refund Use May Say About Someone

Among 1,049 affluent investors surveyed in February by John Hancock Financial, half said they expect to receive a 2014 Federal income tax refund while 29% expect to owe taxes.

According to the 22nd quarterly Allstate/National Journal Heartland Monitor poll of 1,000 American adults ages 18 and older, more than half (55%) expect to receive a refund on their taxes this year and nearly four-in-ten (39%) do not expect a refund. Six percent of those polled do not know or did not state if they will receive a government refund.

John Hancock found that 52% of affluent investors who expect to receive a Federal tax refund will funnel their check into a savings account, while 25% plan to pay down debt. Close to one in five (17%) say they plan to spend their refund. Only 2% will direct their refund toward their work-related retirement plan.

Of the refund spenders, nearly four in ten (38%) plan to spend their tax refund on a vacation, a decrease from last year when 56% were headed out on vacation. Twenty percent will devote their refund to basic household needs. Last year, 13% said they would treat themselves to a luxury item with their refund money, but this year only 5% plan to do so.

The Allstate poll found among those expecting a refund, most (57%) will use it to cover financial obligations (37% will pay off debt and 20% will spend it on necessities), while only 29% of refund recipients will save or invest their refund. Eight percent say they will spend it on something “nice or fun” and 2% will donate their check to charity.