American taxpayers are less optimistic about this year’s tax refund than they were last year, according to a new report.
The United Services Automobile Association published this finding in a summary of results from the company’s 2013 Tax Season Survey, which compares consumer sentiment and tax refund spending habits between 2012 and 2013. Based on telephone interviews with 1,008 American taxpayers, the USAA survey was conducted by ORC International.
More than half of the USAA survey respondents (53 percent) say they expect to receive a smaller refund than they did in 2012.
“It’s interesting – but not surprising – to see the negative sentiment among taxpayers,” said Scott Halliwell, a certified financial planner at USAA. “With all that’s taken place in Washington over the past few months, a lot of people are confused and concerned about how it will impact their taxes.
“Continued economic volatility and ambiguity around the effects of sequestration have many confused and concerned about their tax refunds,” he adds. “Interestingly, Gen Xers appear to be much more skeptical about their refunds than their younger Millennial counterparts.”
According to the survey results, nearly 65 percent of Gen Xers (35-44) expect a smaller refund than last year, compared to 42 percent of their Millennial peers (18-34). More than half of Millennial taxpayers (56 percent) expect the same or higher refund this year.
In addition to increased optimism about a higher return, the survey shows that 63 percent of Millennials who have not yet received this year’s refund plan on stashing their cash in savings, an 11 percent increase compared to how they allocated last year’s refund.
The report adds that seven percent fewer of those surveyed plan to pay down debt with their refund money compared to last year.