The average tax refund is expected to fall by 13 per cent to $2,344 this year, with nearly half of tax payers planning to use their wind fall to pay off debt, a new survey shows.
Bankwest's Taxing Time survey of 818 taxpayers also found that 42 per cent of taxpayers expect to receive a refund of less than $1000 this year, while five per cent expect to receive nothing.
One in 10 taxpayers is likely to end up owing money to the taxman this year.
The survey found that 46 per cent of respondents planned to use their refund to pay off debt, while 30 per cent would save it and 15 per cent would spend it on entertainment.
'People are being far more cautious with their returns than in previous years and using their refund to save or reduce debt,' Bankwest retail chief executive Vittoria Shortt (Vittoria Shortt) said.
She said the majority of people who will use their refund to reduce debt plan to put the money towards credit card bills, followed by paying off the mortgage.
'Gen X is most likely to use their refunds to pay down debt (55 per cent) while retirees are the least likely to use their tax return to pay back their dues (26 per cent),' Ms Shortt said.
But she said not everyone would be lucky enough to receive a refund, or even break even.
'Based on our research - which shows 11 per cent of workers were hit with a tax bill last financial year - it's safe to say more than one million Australians will again owe the tax office money come June 30.'
The survey also found that 59 per cent of respondents planned to use an accountant or tax agent for their returns, compared with 52 per cent last year.
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