Tax Refunds Provide Vital Financial Recovery Options for Millions

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More than 75 percent of Americans filing federal income tax forms will receive a refund. The temptation to spend is strong, but most would be far better off reducing credit balances, beginning with high-interest-rate cards.

As Americans enter the federal income tax filing stretch run, millions look forward to getting something back from the IRS. For most, it's found money that's been out of sight, out of mind.

While most refund recipients won't have unlimited options regarding their windfalls, a leading financial advisor says tax refunds present valuable opportunities to improve a person's financial standing. IRS data reveal that in a recent year 77 percent of individual income tax returns qualified for a refund, the average amount was $2,100.

"That's a serious temptation for most people," Zack Anderson, president of American Debt Control, said. "The lure to spend is great, and for some people that's okay. But for millions of Americans a better choice would be to reduce debt, especially paying off credit card balances."

Each person's situation is different, Anderson said, but there are attractive options for everyone that don't involve blowing the refund on a spending spree. Those include:

  • Set up an emergency fund - you should have a minimum amount equal to at least three months of your salary; six months is better.
  • Pay down debt - this is a great chance to wipe out balances on those high-interest-rate credit cards.
  • Invest - if you have the first two steps under control, extra payments into retirement plans can give a big boost to bottom line results at retirement time.

Anderson says it's not a bad idea to use at least a small portion of the refund to do something special, such as dinner and a movie. He stresses that for people in debt settlement programs, however, debt reduction must be the first priority.

"You might be able to knock out one or two debts completely with a tax return check," Anderson said, "and that removes a big financial pressure that could mean less penny pinching the rest of the year. This has tremendous psychological value beyond dollars and cents."

Anderson adds that people not in debt settlement programs stands to gain by paying off credit balances, starting with the ones with the highest interest rates and biggest balances.

About American Debt Control

American Debt Control, LLC, is a full-service debt settlement company with more than 10 years of experience helping financially distressed people become debt-free and regain control of their lives. Our knowledge and solid relationships with banking and collection institutions nationwide help our clients reach favorable settlements, become debt-free and stay that way, without the lasting stigma of bankruptcy. For more information, call American Debt Control toll-free at 1-866-861-8894, or visit our Website,


David Thompson, Vice President of Operations

American Debt Control, LLC


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