A federal tax refund is the largest lump sum of money received in a year by the average American household.

• An estimated $230 billion¹ in federal tax refunds will be issued this year to the nation’s taxpayers.
• Approximately $140 billion¹ will be in consumers’ pockets by Feb. 15.
• In 2012, the average federal tax refund averaged $2,700², equaling more than a month’s worth of income for two-thirds of taxpayers or more than three months of groceries for the average family of four.

Refunds are especially vital for the estimated 40 percent³ of U.S. households living paycheck-to-paycheck.

• Of those living paycheck-to-paycheck, only 4 percent³ are confident in their ability to plan for their financial future.
• More than one third of households admit to rarely being able to save money (not including a 401K) if any³.

Refunds are the primary reason taxpayers file returns by mid-February.

• Those taxpayers that filer prior to Feb. 15 mirror the profile of a paycheck-to-paycheck household (see Table 1).
• Approximately 84 percent of taxpayers filing in Jan. through Feb. 15 receive a refund, compared to only half of those who file in April⁴.

Table 1
TurboTax Tracking Survey of U.S. Households – 2011

Consumers typically make the largest dent in their credit card debt in the first quarter of the calendar year, fueled by the increase in income due to tax refunds. 

• In 2012, Americans planned to spend an average of $859⁵, adding to the average consumer credit card debt of $8,721⁶.
• The average tax refund could cut almost a third of the average credit card debt.

Early tax filers use tax refunds to pay down debt, cover the costs of every-day living.

• 42 percent of early tax filers plan to use their refund to pay down debt and cover the costs of rent, food and utilities. (See Table 2)

Table 2
TurboTax Customer Survey – 2012

^{1 American Tax & Financial Center estimate based on IRS data for 2011, 2012}

^{2. Average federal refund amount – IRS tax year 2011}

^{3 Intuit market research study – 2009}

^{4. TurboTax Tracking Survey of U.S. Households – 2011}

^{5. American Research Inc. Survey – 2012}

^{6 Mint.com – January 2013}