
If you're a freelancer or contractor like me and you're getting bent over by some fly-by-night accountant named Bob, you probably owe an oddly high amount of money to the IRS this year. But, if you're one of the lucky 100-plus million Americans getting a tax return, it'll be in your best interest to learn how most people are spending their refunded money. Because if there's one thing we know, it's that doing what everybody else is doing is the coolest thing, especially when it comes to death and taxes.
Folks who are receiving tax returns this year fall roughly into four categories. You will notice that the groups get progressively smaller in size and arguably lower in intelligence as you scroll down. Surprisingly, though, men and women mostly agree on how funds will be used. It's nice to agree on something for once. So, which group do you belong to?
The Savers (45%)

With each new year, the government tries to add tax breaks to help people out. People leasing new energy efficient cars, receiving education and health care credits and anyone helping to keep the housing market up tends to get a little bonus in their basket. With a higher than average tax return per person compared to the past few years - $3,120 as of March 2015 - more people are making an effort to save with nearly 45 percent claiming they had plans to do so (at least a little), even if they are spilling over into debt payment and overdue vacationing, as well.
This year's Time magazine survey, however, feared that fewer people - as low as 11 percent - would only be padding their savings, a sign that the cost of living is now more of a priority than planning for the future.
The Debt Payers (40%)

In 2011, roughly 54 percent of Americans got tax returns and nearly 30 percent of those people used theirs to pay off at least some debt. With factors like the cost of owning a new car being higher than ever, people are buckling down on their debts. Time took a poll that had 68 percent of people planning to pay off some sort of debts with their return. That's noble, but there's no sure way to tell if they actually will. The likely statistic is closer to 40 percent, according to several sources.
Most of the expected 66 percent of Americans getting a return will likely come close to saving or paying debts (or both), but there's always the possibility of a last-minute Las Vegas invite to the casinos where they'll not only lose their tax return, but some additional money, just before pawning the wife's car and betting the kids' college funds.
The Practicals (26%)

The past five years have recorded close to a quarter of Americans using their return as sort of an extra paycheck. Many of this type - making less than $50,000 each year, 84 percent of which get a tax return - prefer not to put any pressure on themselves to use the money for a specific use, but would rather continue on with business as usual. Necessity buying is a common activity for the practical type. Getting things fixed, the car tuned up and buying groceries or other regular everyday purchases falling into the mix. Their biggest splurge is likely to be an unplanned case of beer and an extra pack of Juicy Fruit.
The Delinquents (9%)

For every few responsible souls, there will always be a delinquent who doesn't know about their tax return or have a clue what the hell is going on with their life. These folks, which usually serve as 7 to 12 percent of the Petri dish, will undoubtedly be wasting all their returned money on vacations, expensive electronics and items of excess. The money, which was originally theirs, will likely be spent as if it was a free gift from above. This kind of behavior is exactly what the government would like to see: stimulation of the economy through unnecessary spending.
And although Time's survey says that only 6 percent may hang in the bounds of uncertainty and reckless spending this year, there's always an itch to spend the money once it's in your hands. Because of the times, the height of the delinquency seems to be less with more people interested in small splurges like nice meals or new cell phones, compared to expensively lavish vacations and heavy spending. Either way, you can count on this category to - more or less - spend their entire tax return and have no clue what the hell is going on with their life.
Sources:
Mint, Time, DriveTime, DebtRoundup, Bankrate