News Column

Survey Finds Americans Plan to Save and Invest This Year’s Tax Refund

February 20, 2014

TD Ameritrade Launches New Online Tax Center to Help Investors Manage Through the Tax Filing Season

OMAHA, Neb.--(BUSINESS WIRE)-- Many Americans plan to act responsibly when it comes to the money they receive from income tax refunds, according to a recent survey of 1,000 investors released by TD Ameritrade Holding Corporation (NYSE: AMTD). Nearly half (45%) of those surveyed expect to receive a tax refund, and among them, 61 percent plan to save or invest the money. Twenty-one percent plan to use the money to pay off debt, 19 percent plan to spend it on discretionary items and 18 percent expect to spend it on necessities.

The majority (62%) of respondents said they file their taxes on time, but not with any rush. Just 27 percent say they file as soon as they get their W-2s.

More than half of respondents actively manage their withholdings to control the amount of taxes withheld from their pay:

  • 30% manage withholdings in a way that allows them to get less money in their paycheck but get a larger income tax return at the end of the year
  • 27% manage withholdings in a way that allows them to get more money in their paycheck, even if it means they might owe income taxes at the end of the year

    Gen Y More Likely to Save

    Generation Y was more likely than other generations to say they file their taxes as soon as they get their W-2s (44% vs. 26%). Why the hurry? Maybe because they’re the most likely to expect a refund (66% vs. 43%). And getting a refund may be just what they planned – Gen Y was also more likely to say they manage their income withholdings to get a larger refund at the end of the year (44% vs. 29%). Despite the rush to get the money, they are in no rush to spend it. Sixty-seven percent expect to save or invest their refunds.

    “It’s encouraging to see that so many Americans have plans to save or invest their refund money,” said Lule Demmissie, managing director of retirement guidance for TD Ameritrade, Inc. (“TD Ameritrade”), a broker-dealer subsidiary of TD Ameritrade Holding Corporation. “But, there is one lesson some of them could learn – especially those in Generation Y. Rather than giving Uncle Sam extra money throughout the year, they may want to consider adjusting their withholdings so they have that money to invest throughout the year. A small increase in the amount you invest monthly can add up over time.”

    While Americans have plans for their personal income tax refunds, they also have some thoughts on how they’d like the U.S. government to spend tax revenue. If they had a say, public education (41%), health care (37%) and job creation (33%) would be their top priorities.

    Further down the list was investing in the defense of the U.S. (29%), improving quality of health care (22%) and protecting the environment (18%).

    New Tools to Help Make Tax Season Less Taxing

    TD Ameritrade has launched a series of new tools and resources to help investors prepare for the tax filing season. The site includes:

  • a calendar of important tax dates
  • a chart outlining when investors can expect to receive their various tax forms
  • information on Cost Basis, and Understanding Tax Lots
  • a webinar in Estate Planning Basics
  • a downloadable 2014 Tax Guide
  • a Minimum Required Distribution Calculator to help investors determine the required minimum distributions for their traditional IRAs and tax-deferred savings accounts

    “Investors often have questions during the tax filing season because there are so many complex factors to consider, especially given the new cost basis rules that have gone into effect over the past few years,” said Becky Groves, director of tax services & government reporting at TD Ameritrade. “We’ve been very proactive about educating clients on these changes and other important things to consider at tax time, so we are very excited to launch this new online tax center to help simplify the tax filing process for our clients even more."

    For more information visit https://www.tdameritrade.com/education/taxes.page.

    For the latest news and information about TD Ameritrade, follow the Company on Twitter, @TDAmeritradePR.

    TD Ameritrade does not provide tax advice. We suggest you consult with a tax-planning professional with regard to your personal circumstances.

    About TD Ameritrade Holding Corporation

    Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade's (NYSE: AMTD) technology, people and education to help make investing and trading easier to understand and do. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take control, and we help them decide how – bringing Wall Street to Main Street for more than 38 years. An official sponsor of the 2014 and 2016 U.S. Olympic and Paralympic Teams, TD Ameritrade has time and again been recognized as a leader in investment services. Please visit TD Ameritrade's newsroom or www.amtd.com for more information.

    Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org)/SIPC (www.SIPC.org)/NFA (www.nfa.futures.org).

    About Head Research

    Head Research is a division of Head Solutions Group (U.S.) Inc., a leading market research partner for Financial Services companies in North America. With offices in New York, Toronto and Montreal, Head delivers the deep customer insights that increase institutional knowledge and propel business action. TD Ameritradeand Head Research are separate and unaffiliated firms and are not responsible for each other’s services or policies.

    About the 2013 Survey

    An online survey was conducted among N=1,000 U.S. residents who hold an investment account at a brokerage firm or mutual fund company, from December 2-3, 2013, by Head Research on behalf of TD Ameritrade, Inc. Sample was drawn from major regions in proportion to the U.S. census. The statistical margin of error for results of this study is ±3.1% (assumes panelists do not differ from nonpanelists and respondents do not differ from nonrespondents). This means that, in 19 out of 20 cases, survey results for questions based on all respondents (N=1,000) will differ by no more than 3.1% in either direction from what would have been obtained by measuring the opinions of all U.S. residents who hold investment accounts at brokerage firms or mutual fund companies.

    Generational Birth Year Breakdown

    Lost Generation: 1900 to 1945

    Baby Boomers: 1946 to 1964

    Gen X: 1964 to 1976

    Gen Y: 1977 to 1989

    Gen Z: 1990 to 1995



    TD Ameritrade Holding Corporation

    For Media:

    Christina Goethe, 201-369-8541

    Communications & Public Affairs

    christina.goethe@tdameritrade.com

    On Twitter @TDAmeritradePR

    or

    For Investors:

    Jeff Goeser, 402-597-8464

    Investor Relations & Finance

    jeffrey.goeser@tdameritrade.com

    Source: TD Ameritrade Holding Corporation


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