Americans: Bigger Refunds Not Bigger Paychecks

Americans like giving Uncle Sam an interest-free loan, according to a new survey from Kiplinger’s Personal Finance magazine and Barclays US Consumer Bank.

While Americans know they would pay less in taxes throughout the year, nearly two-thirds (63%) of those surveyed say they would rather get a refund than a bigger paycheck (37%). And while nearly one-third (31%) of those who get refunds say they like it because it forces them to save more, the vast majority say they just like getting a refund (63%).

“Americans are addicted to tax refunds,” said Mark Solheim, editor of Kiplinger’s Personal Finance magazine. “Despite knowing they are giving the government a free loan, taxpayers love seeing that big check or direct deposit every year.”

In fact, nearly three-quarters of those surveyed (74%) received a refund last year, with a median amount of $2,154. Those using a tax professional saw a significantly higher refund of $2,620 versus those individuals who do their own taxes and netted $1,715.

Survey respondents used it in a variety of ways:

  • Almost seven out of 10 (67%) saved some or all of it.
  • One-quarter (25%) paid credit card bills.
  • About one-sixth (16%) bought gifts or splurged on a vacation; and a similar number paid for everyday items like groceries.
  • One in 10 (10%) invested the money.
  • A few (3%) used it to pay down student loans.

Notably, women were almost twice as likely as men (30% vs. 17%) to use a refund to pay credit card bills. 

“It makes sense to think about forgoing that big refund and placing your money in a high interest savings account where deposits can earn around 1.7% to 2% annually,” said Andrew Harris, Head of Banking, Barclays US Consumer Bank. “Over time, it’s the smartest play.”

Finding the right bank is the key to maximizing savings and Harris contends it pays to do plenty of homework. “Look for a bank that offers a high interest rate, 24/7 online access and no monthly fees. What’s more, online tools like those offered at are essential for setting savings goals.”

Solheim also noted that a smarter money move for taxpayers would be to change their withholding, so they get more money in each paycheck. And with a larger paycheck, they could divert more money via automated deposits to high-yield savings accounts each pay period.

“Having a disciplined plan will help them grow their savings over the course of the year,” he said.  “Once you get into the savings habit, you’re hooked.”

Impact of the 2017 Tax Cuts and Jobs Act

Last year’s tax return was the first time Americans filed under changes made by the tax overhaul of 2017. What was the impact? Most Americans (60%) report that their taxes remained the same, according to the survey, and the number of those who saw their taxes go down or up were about even (22% experienced a decrease; 19% experienced an increase). The median tax decrease was $861; the median tax increase was $2,000.

copy of the full survey can be seen here along with an article in Kiplinger’s Personal Finance about the survey and tips for making the most out of a tax refund.


The Kiplinger-Barclays national poll on taxes was conducted on December 3-13, 2019, with 852 respondents. The online survey has a +/- 3% margin of error and a 95% confidence level.

Respondents were screened for age, household income and whether they filed a tax return last year. Those participating had a minimum age of 25 and a minimum $50,000 annual household income before taxes.

About Kiplinger’s Personal Finance

For a century, the Kiplinger organization has led the way in personal finance and business forecasting. Founded in 1920 by W.M. Kiplinger, the company developed one of the nation’s first successful newsletters in modern times. The Kiplinger Letter, launched in 1923, remains the longest continuously published newsletter in the United States. In 1947, Kiplinger created the nation’s first personal finance magazine. Today, The Kiplinger Washington Editors, Inc., is a wholly owned subsidiary of Dennis Publishing, Ltd.