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Americans may seek to save or relieve debt with this year's tax returns

Consumer confidence in the economy is a popular topic in the news, in any type of economic cycle. Since 2008, stories on consumer confidence have run through a roller coaster. As we move into March and many Americans are preparing their tax returns, a natural topic is what people intend to do with their tax return, that is, if they are expecting a return this year.

Normally, water cooler conversations about tax returns involve dreams of a vacation, or major purchases. This year, many Americans are planning more conservative uses for their tax returns, according to a recent survey conducted by the National Retail Foundation. The two main uses for tax returns among respondents expecting a return this year are saving the money for a rainy day or seeking debt relief.

The president and CEO of the NRF says, "After a rocky few years, consumers are now more vigilant about how they spend their money and the importance of preparing for future financial stability." Of those expected a tax return this spring, 43.8 percent said that they plan to put money into a savings account.

The second highest response came from consumers who intend to use their tax return to reduce debt, which is the plan of 39.4 percent of the survey respondents.

Other survey participants expect to use the money in other ways. Less than a third of respondents, nearly 29 percent, expect to use their tax return to meet day to day needs. Some still seek to use the money for fun-12.3 percent are planning on major purchases such as a car or new television, while 11.3 percent plan to go on a vacation.

Many of those who intend to find debt relief may simply use their tax returns to pay down debt. However, Ohio bankruptcy lawyers know that tax time often brings many questions from Cincinnati area residents about, not only taxes, but issues under the bankruptcy code.

Source: Debtmerica, "Consumers to use tax returns for debt relief," Feb. 23, 2012

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