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Here's how Americans plan to spend their tax refunds

Most taxpayers expecting a refund this year say they plan on spending on all of it, with more than a third saying the money will go toward paying off debt.

American taxpayers expecting a refund in 2024 say they already have an idea of what they will do with the money. A majority say there won't be any left over for savings after they parcel it out.

The majority of taxpayers can typically expect to receive a refund from Uncle Sam, and for many families, the money can be substantial. Nearly three-quarters of filers received a tax refund in 2023, with an average payment worth about $3,176.

A recent study released by Assurance IQ found that of the 72% of consumers expecting a refund from the Internal Revenue Service this year, more than a third, 36%, plan to pay off debt with the funds, and 30% plan to use it to catch up on their monthly bills.

Less than half, 42%, plan to put at least some of their refund into savings.

YOUR TAX REFUND COULD BE BIGGER THIS YEAR – HERE'S WHY

"Inflation has slowed, but higher prices continue to impact consumers' financial wellness," said Kate Long, consumer financial wellness advocate at Assurance IQ. 

Notably, the survey found that 29% of consumers are considering using their tax refunds to pay for insurance as premiums continue to rise – including nearly half (48%) of Gen Z.

MADE MONEY ON VENMO OR PAYPAL LAST YEAR? WHAT YOU NEED TO KNOW ABOUT YOUR TAXES

"Lower income households who live paycheck to paycheck have been hit hard by inflation," Long said. "An influx of cash, such as a tax refund, can be a lifeline that helps them catch up on outstanding debt or cover critical expenses, like insurance."

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Around 23% of consumers expecting a refund plan to use their tax refund on something "fun," the survey found, while 19% plan to invest it and 3% plan to donate it. Around 12% are undecided on how they will spend it.

FOX Business' Megan Henney contributed to this report.

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