How Americans Spend Their Tax Refunds

With the deadline for the 2022 tax season upon us, we were curious to see how Americans are spending their tax refunds. Do most U.S. residents count on their refunds to make ends meet, or do they use them for stretch purchases? With reports showing refunds will be smaller this year than last, those who rely on refunds could be in trouble. Then there are no deposit bonuses and free spins no deposit that have been created just for this occassion.

We surveyed over 1,200 Americans across all 50 states to find out how refunds are typically spent. We also gathered some data about refund amounts, how they compared to last year’s and expectations, and how residents feel about online tax prep services like TurboTax.

Most Americans Received a Smaller Tax Refund This Year

One of the most important questions we asked this year was, “If you have filed your taxes already, is your refund larger or smaller than you expected?” The results were disconcerting.

A massive 72% of survey participants confirmed that their refund was smaller than the refund received last year. The only states as a whole that saw larger refunds this year include Arkansas, Idaho, Maine, Montana, New Mexico, North Dakota, Washington, and Wyoming.

How Americans Spend Their Tax Refunds

Next, we wanted to know how Americans typically spend their refunds.

Of all participants, just over 42% of them put their refunds directly into savings. Luckily, this group won’t be as adversely affected by the smaller refunds expected this year.

The next two most prevalent responses — each coming in at 17.6% of respondents — were paying bills and paying down debt. That means 35.2% of all Americans rely on their refunds to pay bills and edge down their debt.

Another 13.6% of respondents noted that they use their refund to purchase essentials, like groceries. Unfortunately, that means that nearly half of the country relies on their tax refund for necessary expenses. A smaller refund this year suggests that tens of millions of Americans may be unable to make ends meet.

The states most adversely affected by smaller refunds — with residents who rely on the money for things like bills and essentials — include the following:

  • Alaska
  • Arkansas
  • Delaware
  • Hawaii
  • Kansas
  • Mississippi
  • Montana
  • Nebraska
  • Nevada
  • New Mexico
  • North Dakota
  • Rhode Island
  • South Carolina
  • South Dakota
  • Tennessee
  • Vermont
  • Washington
  • Wyoming

Interestingly, Gen Zers appear to be the most adversely affected by the smaller tax refunds this year, with 33.95% noting that they rely on refunds to make ends meet. Baby boomers are the least negatively affected, with closer to 20% relying on the funds to get by.

Our survey results also showed that women are more adversely affected by the lower refund amounts than men and non-binary respondents. Nearly 38% of females rely on their refunds, while around 22% of non-female respondents do.

Americans Want More Out of Tax Refunds to Reflect Inflation

It’s clear from the data that refunds are going to be smaller this year than they were last year for most Americans, but we also wanted to know how respondents felt about the decrease.

A staggering 80% believed they should receive an additional tax credit this year due to inflation and mass layoffs that have occurred throughout 2022. Inflation rates hovered around 7% throughout 2022, which means those lower refunds are worth even less in the country’s current financial situation.

With over 30% of respondents noting that they rely on their refunds to make ends meet — and an additional 13.6% using the refund to buy essentials — the decreased refund amount could be catastrophic for tens of millions of U.S. taxpayers.

The most adversely affected states — where 50% of respondents or more rely on their refunds to get by — include:

  • Delaware
  • Hawaii
  • Montana
  • New Hampshire
  • Nebraska
  • North Dakota
  • South Dakota
  • Vermont
  • West Virginia

Wrapping Up: Dealing With Lower Tax Refunds In 2023

With tax refund amounts disappointing 72% of surveyed Americans this year compared to last — and almost half the country relying on refunds to make ends meet — preparing to get less money back on your taxes is crucial. This is especially true for those who rely on their refunds for essentials or to pay bills.

One way to save a little is to file your taxes for free, which you can do without using programs like TurboTax if you earn less than $73,000 annually. This is something more than a third of respondents didn’t know you could do. It’s an option that could save on unexpectedly high filing fees from TurboTax, which was reported by around 37% of survey participants.

Unfortunately, more careful budgeting and penny-pinching will likely be necessary for those who rely on their refunds to make ends meet. Hopefully, the survey results we’ve discussed above will at least prepare you a bit for what is likely going to be a smaller tax refund than you saw last year.


We surveyed 1,210 Americans between March 31st and April 1st, 2023 to gather the data required for this study. The average age of participants was 40 years old. Around 50% of the survey participants identified as male, 48.42% identified as female, and the remaining 1.82% identified as non-binary/other.

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Published on: 2023/04/12

Written By:

Ian Harper