Record-low number of people plan to spend tax refunds this year, but local businesses still expect bump in sales
March 11, 2017
Get your return on time
According to a news release from the Taxation Division in Colorado Department of Revenue, simple calculation errors, missing information, as well as fraud prevention measures will make it take longer to process some income tax returns.
To minimize the need for additional review, taxpayers are encouraged to read filing instructions carefully and examine their returns before submitting to determine all information is included and accurate. This inspection includes filling out all forms completely, double-checking math and important numbers, such as bank information if requesting direct deposit refunds, and attaching all relevant documentation.
CDOR encourages taxpayers to pay particular attention to the following fields for potential errors and/or omissions:
» Phone Number
» Date of Birth
» Social Security Number or Individual Taxpayer Identification Number (ITIN)
» Driver License or ID Number
» Employer ID Number on W-2 document(s)
» Bank Account Information (Routing No/Account No)
Check the status
To check the status of your refund, go to https://www.irs.gov/refunds.
Although most Americans plan to use their 2016 tax refunds to stash some cash or pay off debt, local businesses still expect to feel the love this tax refund season.
Every year, some residents rely on their tax refunds to make some pricier investments. However, according to a survey conducted by the National Retail Federation, a record-low number of people will spend their tax refunds this year.
Of the 66 percent of folks who will be getting a tax refund, about 48 percent plan to put that money into savings and 35.5 percent plan to pay down debt, the survey found.
That trend excites Kim Larson, a financial adviser with Edward Jones Investments, 910 54th Ave. She encourages saving for the future anytime the opportunity presents itself — if not always. Larson said she always suggests to her clients, who range in age from young adults to those about to retire, to put their tax refund money away into an IRA or a Roth IRA, rather than spend it on luxury or nonessential items.
“People need to be focused on saving an appropriate amount every month to ensure they can retire to the lifestyle to which they have become accustomed.— Kim Larson, financial adviser with Edward Jones Investments
By doing that, people are investing in their future, which will prove beneficial when they finally plan to retire. Larson, who has been a financial adviser for 24 years, actually suggests people save a good chunk of their paychecks monthly, and the tax refunds are simply an added bonus.
Although a shopping spree or a getaway vacation might be tempting with the extra funds from the government, Larson said future you will thank yourself for putting that money away.
"I always say if you can't feel it, you aren't saving enough," she said. "People need to be focused on saving an appropriate amount every month to ensure they can retire to the lifestyle to which they have become accustomed."
But others go for the big items they can't normally afford.
Bob Ghent, owner of Ghent Chevrolet Cadillac, 2715 35th Ave., said his car dealership has seen an increase in the amount of money people are putting toward their down payments. He said car buyers typically put about 10 percent down when purchasing a new vehicle, but around tax seasons, that bumps up to 20 percent.
Ghent said this trend is something he is seeing more this year than in previous years.
"There are a lot more people putting money into the deal around this time," he said, "which is good for them, and it certainly helps the financing of the car. It's great."
Alas, folks who are desperate for a vacation or are jonesing for a new camper will inevitably use the extra federal funding to pay for one. And that's not a bad thing. It benefits local businesses and the economy.
According to the National Retail Federation, about 10.7 percent of consumers plan to spend their tax refunds on a vacation, 8.7 percent will use the money on a major purchase, such as a new television or an RV, and 7.6 percent will use their tax refunds on a "splurge" purchase, which can include dining out or a day at the spa.
Mait Parker, general manager for Great Outdoors RV, 3511 W. Service Road, Evans, said every year he gets buyers who use their tax refunds as a down payment to get them into a camper they want. He's been with the business for about 10 years, and he sees the pattern occur annually.
"We definitely get a bump in sales in March and April," he said. "That could definitely be because of people getting back their tax returns."
This year in particular has been a good year so far in RV and camper sales, with a 45 percent growth in sales in January compared to last year and a 20 percent growth in February. He credited the unusual warm winter weather as a reason folks might have the "camping bug" more so than usual, but he expects that pattern to carry on in March and April, especially as people get a little extra cash back from the government.
Lisa Keyser, manager of New Horizons Travel, 3510 10th St., said now is a busier time to be a travel agent in the area though she couldn't exactly say it was because of tax refund season when there are other timely factors like spring break and graduation trips. She has had clients who will plan a trip in the fall and expect to use their tax returns toward the final payment of that trip, she said.
Basically, if people want to travel, they're going to find a way to travel, she said, and tax refunds can play a big part in paying for that.
"Even when the economy was poor, people still would spend their tax returns on a trip," Keyser said. "There are a lot of different things you can do in respect to paying for travel. Using a tax return is just one of them."
About 36 percent of Americans file their taxes in February, 25 percent of the population files in March and 15 percent are the procrastinators who file in April, according to the National Retail Federation. According to a study done by Bankrate.com, millennials are the generation most likely to save or invest their tax refunds.