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Americans Use Tax Refunds to Pay Down Debt, Buy Necessities

About half of Americans expect to get a check from Uncle Sam at tax time, with young adults and upper-middle class families most likely to get refunds.

A new survey from Bankrate.com conducted in mid-February found that 3 percent of Americans had already gotten their refunds, with an additional 48 percent expecting to get money back from taxes this year. That 51 percent total is the same as last year.

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Although 31 percent of respondents overall said they plan to save or invest their refunds, Americans’ choices for what to do with their annual windfalls reflects a continued economic struggle for many, with 28 percent saying they’d use the money to pay down debt. Another 27 percent said they’d spend their refunds on necessities, a figure that’s actually a single percentage point higher than it was back in 2010, immediately after the recession.

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About two-thirds of adults under the age of 30 had received or expected to receive a refund, compared to just 30 percent of those over 65.

Being either very rich or very poor doesn’t help your chances of getting a refund, but being upper-middle class does: Just over six in 10 respondents who earned between $50,000 and $75,000 said they have gotten or expect to get a refund this year, 10 percentage points higher than the total across all income brackets.

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Older and wealthier Americans are more likely to owe money at tax time, the survey found, and the youngest and oldest age brackets — respondents under 30 and over 65 — were more likely than average to say they plan to save or invest their refunds.