Business

Frugality the rule for refunds this year

WASHINGTON — Most people say they plan to use this year's tax refund to pay bills, deciding in this sour economy to be more frugal with their annual windfall.

Fifty-four percent of those receiving refunds said they intend to pay off credit card, utility, housing and other bills, according to an Associated Press-GfK poll that was released Monday. That compares with 35 percent who said the same thing a year ago.

Only 5 percent, about the same as a year ago, said they planned to go on a shopping spree.

The survey found that 38 percent of those receiving a refund said they plan to spend at least part of it. But the spending appears to be mostly on basic needs: 17 percent said they would use the money for everyday needs, such as food and clothing. It was 7 percent a year ago.

The poll found that 35 percent of those receiving refunds plan to save or invest at least part of the money, a slight increase from a year ago.

About 37 percent said they planned to use their refunds to pay down debt, including credit cards, and student and personal loans. A year ago, 24 percent said they would use at least part of their refunds to pay down debt.

The deadline for filing personal 2008 tax returns is Wednesday. As of last week, the Internal Revenue Service had sent out about $200 billion in tax refunds. IRS Commissioner Doug Shulman said the agency expects to send out about $330 billion by the end of tax season.

The AP-GfK poll found that 57 percent of adults said they expect to receive a tax refund. The average refund this year is about $2,700, compared with $2,500 last year, Shulman said.

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