Tax season is upon us, and Americans are starting to get their personal finances in order. This is the first tax cycle where President Trump’s tax cuts passed in December of 2017 are in full effect. As the tax filings come in, the IRS
has found that the average return is down by 8 percent compared to the same time last year. Though it varies case to case, for most people, the refund at the end of the year is smaller or nonexistent because less money was taken out of each of their paychecks
—a process known as reduced withholdings.
Despite that drop in returns, the National Retail Federation
estimates that the share of Americans
who aim to save their refund is growing. Back in 2009, about 39 percent of respondents to the annual survey planned on saving the money they got back. Within a decade that number has grown; now about half of respondents plan on saving their tax refund. As the number of people who intend to save has increased, the number of people who wish to use that extra money to pay off their debt has shrunk. In 2009—at the height of the financial crisis--- almost half of respondents reported planning on using their refund to pay off debt. By 2019, only around a third of respondents intended to use their return for that same end.