Sorry, you need to enable JavaScript to visit this website.
Skip to main content

Wednesday, March 29, 2023

2023 tax season plans and expectations

2023 tax season plans and expectations

2023 taxes

By
The Currency

Tax time in America

Between all the confusing line items, exemptions, and deductions, it’s easy to see why there’s an entire industry dedicated to helping Americans file their taxes. How well-versed is the average person in tax filing? Do they expect to owe more taxes this season or get a hefty return? If so, how will they save or spend it? Empower surveyed more than 1,000 taxpayers to find out.
 

Survey chart

Tax refund amounts and expectations

Out of the 35% of people who filed their taxes as of February 2023, Gen Z was the most likely to have filed early (though that could be the result of delegation – 15% of Gen Zers said they are having their parents file their taxes for them this year). On average, those who have filed early are seeing smaller returns – the average refund so far this year is $1,016 dollars, $238 less than previous refunds. Those who have yet to file their taxes expect even less to come their way – on average, respondents who haven’t filed said they expected a tax refund of $792.
 

Investing in their future

Tax refund spending plans

Across all generations, personal savings, credit card debt and groceries were the top ways respondents expected to use their tax refund, with 43% (and half of Gen Z) specifically saying they are saving their refund to prepare for a recession. Nearly one-in-five Gen Zers and Millennials said they planned to use their refund on rent, while 13% of Baby boomers and Gen Xers are planning to use the fund for vacation.

Investing for the future was also on the minds of respondents, with 20% saying they are investing in stocks, bonds or crypto currencies. 29% of Millennials and 23% of Gen Z said they planned to invest their refund, compared to just 14% of Baby Boomers and Gen Z.

Top 5 things each generation plans to spend their tax refund on:

Baby boomers

  • Personal savings (33%)
  • Credit card debt (31%)
  • Groceries (20%)
  • Retirement fund (15%)
  • Vacation (14%)

Gen X

  • Personal savings (37%)
  • Credit card debt (36%)
  • Groceries (23%)
  • Vacation (13%)
  • Car repairs/maintenance (10%)

Millennials

  • Personal savings (37%)
  • Credit card debt (33%)
  • Groceries (21%)
  • Rent (19%)
  • Car payment (12%)

Gen Z

  • Personal savings (35%)
  • Credit card debt (24%)
  • Groceries (21%)
  • Rent (21%)
  • Tuition/education expenses (13%)
     
Investing in their future


Methodology

Empower surveyed 1,006 Americans about their taxes. This sample included 251 baby boomers, 254 Gen Xers, 259 millennials, and 242 Gen Zers. Of these respondents, 350 had already filed their taxes at the time of responding to the survey.

About Empower

Empower, a leader in financial planning, investing, and advice, is dedicated to creating financial freedom through people and technology.

Fair Use Statement

Learn some interesting facts about taxpayers? Please feel free to share our research for any non-commercial purpose. We only ask that you include a link to this page in doing so.

RO2789882_0323

Empower flag logo

The Currency

Editors

The Currency is a personal finance publication powered by Empower and run by a team of writers and editors. We deliver the financial news and views you need to know for life, work and play.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. No part of this blog, nor the links contained therein is a solicitation or offer to sell securities. Compensation for freelance contributions not to exceed $1,250. Third party data is obtained from sources believed to be reliable; however, Empower cannot guarantee the accuracy, timeliness, completeness or fitness of this data for any particular purpose. Third party links are provided solely as a convenience and do not imply an affiliation, endorsement or approval by Empower of the contents on such third party websites.

Certain sections of this blog may contain forward-looking statements that are based on our reasonable expectations, estimates, projections and assumptions. Past performance is not a guarantee of future return, nor is it indicative of future performance. Investing involves risk. The value of your investment will fluctuate and you may lose money.

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements. Advisory services are provided for a fee by either Personal Capital Advisors Corporation ("PCAC") or Empower Advisory Group, LLC (“EAG”) depending on your specific investment advisory services agreement. Both PCAC and EAG are registered investment advisers with the Securities and Exchange Commission (“SEC”) and subsidiaries of Empower Annuity Insurance Company of America. Registration does not imply a certain level of skill or training.

“EMPOWER” and all associated logos, and product names are trademarks of Empower Annuity Insurance Company of America. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice. ©2023 Empower Annuity Insurance Company of America. All rights reserved.

“EMPOWER” and all associated logos, and product names are trademarks of Empower Annuity Insurance Company of America. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice. ©2023 Empower Annuity Insurance Company of America. All rights reserved.