TransUnion Study Reveals Half of Americans Say They Plan to Save Tax Refund, Not Pay Down Existing Debt
CHICAGO, IL--(Marketwired - Apr 10, 2014) - While the days leading up to the April 15 tax filing deadline can be unnerving for millions of Americans, TransUnion encourages consumers to start early to minimize stress, file safely to minimize exposure to tax fraud, and to put their tax refund, if expecting one, to good use by paying down existing debt to help their credit health.
According to a Google Consumer Survey conducted by TransUnion, almost half (48.6 percent) of Americans surveyed said they anticipate receiving a tax refund this year. Of those, almost half (48.3 percent) said they plan to save the refund, a third (32.2 percent) said they plan to pay down existing debt, and about one in five (16.8 percent) said they plan to treat themselves and spend it.
"Whether consumers expect to receive a refund or anticipate having a tax bill to pay, it is important to correctly make a plan now and be prepared. An important step is to obtain and review their credit report," said Julie Springer, vice president at TransUnion. "If they anticipate a refund, consumers should consider making a plan to use their refund to pay down debts, especially those with high balances or high interest rates. If they will receive a tax bill, they should plan ahead so that you can pay the bill on time, as well as meet their other monthly obligations."
To help consumers plan for tax season, TransUnion offers the following tips for how best to best prepare, use their tax refund or pay their bill.
- Organize. Before preparing your tax return or seeking assistance from a professional, organize all your necessary documents. Obtain your W-2s to report wages, your 1099s to report interest and dividends, your 1099Bs for reporting stock and bond sales, and your 1098s for deducting your interest and taxes. Other key documents include receipts and credit card slips for business expenses, major purchases, charitable donations and other notable transactions.
- Make a plan. The sooner you complete your return, the sooner you can receive your refund or the more time you will have to pay your tax bill by the deadline.
- File Safely: The Treasury Inspector General for Tax Administration last summer reported discovering 1.5 million potentially fraudulent 2011 tax refunds totaling in excess of $5.2 billion. With e-filing, evidence of fraud is difficult to find. There are no signed tax forms, envelopes or fingerprints, and e-filing promises quick refunds. You may be unaware that this has happened until you file your return later in the filing season and discover that two returns have been filed using the same Social Security number. Be alert to possible identity theft if you receive an IRS notice or letter that states that:
- More than one tax return for you was filed,
- You have a balance due, refund offset or have had collection actions taken against you for a year you did not file a tax return, or
- IRS records indicate you received wages from an employer unknown to you.
If you receive a notice from IRS, respond immediately. If you believe someone may have used your Social Security number fraudulently, notify IRS immediately. You will need to fill out the IRS Identity Theft Affidavit, Form 14039.
- Pay Down Debt. If you expect to receive a refund, review your credit report and look for debts that make sense to pay down, which in turn could potentially boost your credit score.
- Save Now. If you expect to receive a tax bill, you can prepare and begin saving now to pay it off immediately so you don't find yourself in a situation in which it is challenging to pay your other bills. Since missed and late payments can affect your credit score, it is important to pay each bill on time, every time.
- File On time. Make sure you file your tax return on time. If you owe money, interest and penalties may accrue for not filing. Remember, this year's deadline for filing federal and state income tax returns is Tuesday, April 15, 2014.
- Plan for 2015. Consider organizing for next year's tax season now. Make a folder and keep copies of important tax documents so that this time next year, you'll be that much more prepared to file your taxes.
TransUnion Interactive, Inc. is a consumer subsidiary of TransUnion. As a global leader in credit and information management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering comprehensive data and advanced analytics and decisioning. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Founded in 1968 and headquartered in Chicago, TransUnion employs associates in more than 33 countries on five continents. www.transunion.com. Follow us on Facebook at http://www.facebook.com/TransUnion.