Nearly a third (30 percent) are Unaware of the End of the Payroll Tax Holiday and Smaller Paychecks This Year
MCLEAN, Va., March 5, 2013 /PRNewswire/ -- The April 15th tax filing deadline is approaching and according to the latest IRS statistics, the average federal tax refund this year will be $2,803. For the third year in a row, Capital One Bank's annual Taxes and Savings Survey found that most Americans (85 percent) expect to get a refund and more than a third (35 percent) plan to spend all or part of it.
Navigating the Impact of the Payroll Tax
In gauging the response to the recent elimination of the payroll tax holiday by Congress—which will increase the amount of taxes taken from employees' paychecks—42 percent of those surveyed were "very aware" that their take-home pay would decline in 2013, while nearly a third (30 percent) said they weren't aware at all.
"At a time when people are seeing smaller paychecks, now more than ever they should take a step back, evaluate their financial goals and consider saving their tax refund," said Mickey Konson, Managing Vice President for Retail Banking at Capital One Bank. "People tend to think of their tax refund as free money or an annual bonus, which makes it very tempting to spend it right away, but remember, that refund is your own money – without added interest. Tax season is a great time to plan ahead, with an eye toward your financial goals."
How Americans are Using Their Refund
Capital One's survey found that the majority of Americans (65 percent) do not calculate their tax refund or tax payment into their annual budget. More than a third (35 percent) plan to spend all or part of their refund. Nearly a quarter (22 percent) of Americans plan to use their refund to pay down debt, while a relatively small percentage will save (16 percent) or invest (4 percent) their returns. Of those who plan to spend all or part of their refund this year:
The survey findings also showed that most people have some anxiety when filing their tax returns:
Only 14 percent of Americans feel no anxiety in filing their taxes.
Capital One Bank Tax Season Tips
Capital One Bank offers the following tips for consumers considering how they can boost their savings, whether it's making a savings plan for a tax refund or planning to set aside cash to pay taxes they might owe for next year:
The findings reported in this release are from a telephone survey conducted by the opinion research firm, Braun Research of Princeton NJ. The survey was sponsored by Capital One Financial. Braun Research completed 1,006 landline and cell phone interviews with US resident adults age 18 and over. All interviews were with one household member only selected at random. The interviews were conducted February 5, 2013 through February 10, 2013. The margin of error for the national sample is +/- 3.1 percentage points at the 95 percent confidence level. Interviews were monitored at random. Sampling for this study was conducted using a national probability replicate sample. All interviews were conducted using a computer assisted telephone interviewing system while the cell phone completes were dialed manually to comply with federal laws. Statistical weights were designed from the United States Census Bureau statistics.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $212.5 billion in deposits and $312.9 billion in total assets outstanding as of December 31, 2012. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has more than 900 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.
Contact: Laura DiLello
SOURCE Capital One
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