DENVER (CBS4) – Tuesday is the day Americans paid off their taxes for the year. According to the Tax Foundation Tuesday is Tax Freedom Day.
The foundation says the average American has to work 102 days to pay off his or her 2011 tax bill. That’s three days longer than last year.
Tax Freedom Day comes as many are putting the finishing touches on their 2010 tax filings. There are three extra days this year because taxes aren’t due until April 18 because of a Washington, D.C. holiday which falls on Friday.
A recent survey says the average taxpayer is getting $3,000 back this year from the IRS. There are plenty of people having fun with that money, but the majority is planning to hold onto it.
At the Liberty Tax Office taxpayers have been planning on what to do with their refunds.
“I’m going to plan to invest my tax return,” Deborah Snow said.
Snow represents 43 percent of Americans who say they will save their refunds rather than spend them.
“If you want to save it, the place you’ll earn the most interest right now is an online bank savings account,” financial planner Brian Sells said.
Instead of 1/10th of 1 percent that most savings accounts pay, Sells prefers a site like ING Direct, which offers a higher return. He says more people are saving rather than paying off bills.
“If you think your job is a little tenuous right now, to build up some liquidity right now is a good idea,” Sells said.
For those who don’t need savings for a few years, Sells suggests investing in quality blue chip stocks that offer high dividends. That’s exactly what Snow is doing.
“This is a new philosophy to hop in the market,” Snow said. “(It’s) something new for me.”
Only 13 percent of taxpayers say they’ll go shopping for big ticket items with their refund this year.