This year, 46% of taxpayers intend to keep their refunds.

Numerous Americans plan to allocate their IRS refunds towards increasing their personal wealth.

A LendingTree survey of over 1,000 taxpayers found that 46% of them plan to save their refunds, up from 41% in 2021 and 40% in 2020.

Over 63 million Americans have filed their 2021 tax returns and the IRS has issued a total of $151 billion in refunds by March 11. This represents an average refund of $3,352, which is 13% higher than the previous year.

A tax refund is a significant financial boost for many individuals, and it can play a vital role in their budgeting. According to a survey, aside from saving, Americans often use their refunds to pay off debt and improve their family's financial situation.

Matt Schulz, LendingTree's chief credit analyst, stated that it is beneficial to observe that individuals are utilizing refunds or planning to use them primarily for saving and paying off debt, given the increasing cost of living and the likelihood that debt will become even more expensive as the Fed continues to raise interest rates.

Refunds applied

Younger workers, women, and those with lower incomes were more likely to use their refunds for saving, paying down debt, or covering necessary expenses, according to the data.

"Savings are crucial, as the pandemic has taught us, emphasized Schulz. Many people have realized this lesson, as they have learned that unexpected events can occur at any time and their severity is unpredictable."

A survey found that more than 60% of Gen Z respondents, aged 18 to 25, plan to save their refund cash, compared to 47% of millennials and 41% of boomers. Additionally, Gen Z respondents were more likely to invest their refunds, according to the survey.

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Men were slightly less likely than women to use a refund to pay down existing debt. Some 34% of men said they'd put a refund towards debt management, compared to 41% of women.

Women often face more financial challenges than men, as they typically earn less, are more likely to be single parents, and may need to take time off to care for children or family members, said Schulz.

Last year, one-third of those earning less than $35,000 said they would use their refund to cover necessities such as rent and groceries.

""As inflation and interest rates increase, I believe the number will also rise, which is challenging for those affected," stated Schulz."

Some survey respondents indicated that they planned to use their refund to treat themselves to a desired purchase or take a vacation.

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