New Survey Finds Americans Prioritize Spending Tax Refunds on Essentials in 2025

AUGUSTA, Ga., May 2, 2025 /PRNewswire/ -- A new survey of America's taxpayers reveals a distinct trend in how people are spending their tax refunds in 2025. Sixty-one percent of the taxpayers polled said their refund played a key role in budgeting for 2025, up from 52% who said the same about last year.

The study, commissioned by TaxSlayer and conducted by Talker Research, surveyed 2,000 U.S. taxpayers in two parts – one in December 2024, and one after Tax Day 2025 – to compare expectations with actual spending behavior. The findings show that this year, most Americans are treating their tax refunds as an essential part of their annual financial strategy.

According to the results, nearly two-thirds (64%) of taxpayers have already spent or plan to spend their refunds, and the majority say that money is going toward essential expenses, including rent or housing costs (58%), groceries (48%), paying down credit card debt (29%), and home repairs (13%).

Likewise, taxpayers who haven't spent their refunds yet are being judicious in their spending, with 72% saying they plan to use those funds exclusively for necessities.

"The data really shows that thoughtful spending is becoming a priority for many Americans, and tax refunds are playing a pivotal role in their financial plans this year," says Seth Babb, Head of Consumer Product at TaxSlayer.

The average refund reported by respondents came to just over $2,300. This is significantly higher than the $1,700 average predicted by respondents in December 2024, but lower than the IRS's reported average of $3,453 as of February 2025.

In December, only 22% of survey respondents were expecting a larger tax refund than last year, but 32% ultimately received more, and taxpayer sentiment is quite positive overall. Sixty-two percent of taxpayers said they were "happy and surprised" by the amount they received – up significantly from just 40% who felt that way last year.

The reasons for larger refunds included working more hours (37%), adjusting deductions or withholdings (31%), or receiving a pay raise or promotion (16%). Meanwhile, those who received less this year attributed it to job loss (29%), entering a higher tax bracket (21%), or dependents aging out of eligibility (11%).

The study also shed light on filing behaviors. In December, 43% of respondents said they planned to file early, and 54% aimed to file on time, and the results closely aligned with those intentions: 41% filed early, 57% filed on time, and only 2% requested an extension.

Looking ahead, early filing is expected to remain a trend. Among those who plan to file early in 2026, the top reasons include receiving their refunds sooner (47%) and avoiding Tax Day stress (29%).

"Filing your tax return early empowers you to take control of your finances," Babb adds. "By knowing your refund amount ahead of time, you can make informed decisions and choose the best options. Early filing turns your refund into an opportunity to strategically plan for your goals." 

TaxSlayer is an easy-to-use online tax filing platform with unlimited support at a fraction of the cost of the competition. Trusted for 60 years, the Augusta-based tech company successfully completed more than 11 million federal and state e-filed tax returns in 2024 and processed over $22 billion in refunds. With over 29,000 reviews on consumer review site Trustpilot, 82% of customers rate TaxSlayer Great or Excellent. On top of ensuring 100% accuracy, TaxSlayer has a maximum refund guarantee and is committed to providing the right tools at the right price. For more information, visit www.taxslayer.com.

SOURCE TaxSlayer