Staperfenne, 34, isn’t ashamed to admit that he went
out and spent most of his family’s income tax refund
for 2017 right away.
the entire $3,700. Gone.
don’t wrongly label Staperfenne as a spendthrift. Most
of that money went toward the loan for a 2012 silver
Ford Fusion that he bought used last summer for around
paid it all off in one fell swoop and it was gone,"
said Staperfenne, who lives in Grosse Pointe Woods,
Mich., and teaches 10th grade economics at University
Prep Academy High School, a charter school in Detroit.
many people love to dream about taking a great vacation
with a four-figure tax refund or maybe about shopping
for something special.
the reality is that many of us are plunking tax refund
cash back into our cars. Repairing the transmission.
Fixing the brakes. My husband is thinking that maybe it’s
time to get a set of new tires for his SUV.
car sales even ride on tax refund cash, according to
Jonathan Smoke, chief economist for Cox Automotive.
said used vehicle sales are very much correlated with
peak period for used vehicle sales typically follows
when tax refunds have been received by most
households," Smoke said.
expect the next two months to be the strongest two
months of the year for used vehicle sales, given the
confluence of an already strong trend combined with the
delayed tax refund peak."
federal income tax refunds are issued in less than 21
days after the return has been electronically filed,
according to the IRS. Some returns that include errors
or need further review take longer. See www.irs.gov for
"Where’s My Refund?" to check your status.
tax refunds for some earlier filers who filed returns
beginning Jan. 29 didn’t arrive this year until late
February or early March — a bit later than in the
tax fraud prevention policy, which was enacted last
year, specifically delays tax refunds for some early
filers. By law, the Internal Revenue Service cannot
issue refunds before mid-February for taxpayers claiming
the Earned Income Tax Credit or the Additional Child Tax
year, the IRS said taxpayers who claimed the Earned
Income Tax Credit and the Additional Child Tax Credit
began seeing refunds in bank accounts or on debit cards
the week of Feb. 27. That is if they filed early in the
season, chose direct deposit and there were no other
issues with the tax return.
challenged households eligible to receive such tax
credits, Smoke said, are the income groups responsible
for almost half of used car and truck sales. The tax
refund makes a good down payment.
was good for both new and used sales," Smoke said.
"I suspect April will be best for used vehicle
sales, though because of the timing for tax
refund cash is the biggest windfall that many families
see in a year.
average, taxpayers received $2,893 for federal income
tax refunds through March 30, up about 0.5 percent from
the same time a year ago, according to IRS statistics.
73.4 million taxpayers received refunds thus far —
down 1.1 percent from the same time a year ago. About 78
percent of returns filed by individuals so far generated
dollars rush through local economies across the country,
considering that $212.3 billion was issued in individual
income tax refunds nationwide through March 30.
states see more money than others. Texas ranked No. 1
for the largest average income tax refund in 2016 with
an average refund of $3,133.
states rounding out the top five are Oklahoma,
Louisiana, New York and Connecticut, based on research
in the bottom five for average refund cash are: Montana,
Wisconsin, Vermont, Oregon and Maine at the last spot
with an average of $2,302.
$2,500 or $3,000 income tax refund can be a sizable down
payment, particularly on a used car.
it comes to the used car market, one of the most popular
vehicles sold in 2017 with a $3,000 down payment was a
2014 Nissan Rouge, according to Dealertrack data.
$3,000 down last year meant an average payment of $327 a
month on that vehicle, Smoke said.
who are struggling with bad credit might use a tax
refund to flat out buy a super cheap used car,
especially if they’re looking at a refund of $2,000 to
see a lot of people coming in wanting to spend that kind
of money," said Tadd Milavec, used car sales
manager for Genesis Auto Sales in Roseville, Mich.
the $2,000 price range, someone might be able to get a
2004 Ford Taurus with around 145,000 miles. Other 2004
models might be in that price range with mileage of
90,000 to 170,000.
thousand dollars doesn’t get you much these
days," Milavec said.
said lately he hasn’t seen as much tax-refund uptick
as he had in the past. Maybe April will pick up but
things seem slower when it comes to tax refunds, he
past couple of years, you could set your watch by
it," Milavec said.
"you definitely get a boost but nothing
research indicates that consumers are more inclined to
pay down debt and save for necessities or emergencies,
like a major car repair.
Brown, 20, said much of her $1,000 income tax refund
went toward fixing her 13-year-old car.
who works at the General Motors Technical Center in
Warren providing driving directions for GM’s OnStar
customers, recently spent about $700 on some
transmission-related expenses for her 2005 Jeep Liberty.
She got a price break from a friend who helped her out.
consumers appear to be taking a sensible approach to
their tax-time riches.
49 percent of taxpayers expecting a refund say they’ll
put that money into savings, according to the annual tax
survey released by the National Retail Federation and
Prosper Insights & Analytics.
up from 48 percent last year and the highest level in
the 12-year history of the survey. About 35 percent of
those surveyed said they’d pay down debt, in line with
last year and the lowest level since 2016. During the
recession in 2009, about 48 percent said they’d use
their tax refund to pay down debt.
who are receiving tax refunds aren’t planning to
splurge for the most part — or they’re not admitting
to it in surveys.
12 percent of those surveyed said they’d use their tax
refund for a vacation. And 10 percent said they’d
"splurge" on dining out, trips to a spa or
shopping for clothes.
8 percent said they would make a major purchase ranging
from buying a TV or furniture to a car.
consumers, in particular, appear to be more mindful of
Meinke, 29, said he’d like to think about splurging
with his tax refund. But he’s saving his $970 federal
income tax refund in case his 2006 Mercury Mountaineer
who filed his tax return in January, is studying for an
information technology degree at Macomb Community
College, as well as working.
he filed his tax return, he had to pay a penalty of more
than $700 for not having health insurance and having no
health coverage exemptions that would apply. So his
refund was reduced by that expense. He’s not confident
about casually spending what’s left of that refund.
how life is, you always have to keep it for
savings," said Meinke, who works as a bartender and
waiter at Uno Pizzeria & Grill in Sterling Heights,
never know what’s going to happen."
you never know how much longer your car can keep