By Cliff Peale
The Cincinnati Enquirer
Shelly Kelley and her husband, Jim, already have a plan for their 2004 tax refunds.
The California, Ky., couple is expecting about $5,800 in combined federal and state tax refunds this year. They have put the check from the state into a savings account. After they get the federal refund, they'll take about $1,000 and make an extra mortgage payment, and the rest probably will go for new windows and possibly cabinets in their kitchen.
LATE DROP-OFF SPOTS
Several U.S. Postal Service branches across Greater Cincinnati will accept tax returns until midnight Thursday.
Offering drop-off service:
Anderson Township branch, 1320 Nagel Road.
Don Marrs branch, 3644 Werk Road, Westwood.
Parkdale branch, 670 Northland Blvd., Forest Park.
Sharonville branch, 11069 Reading Road.
Symmes Township branch, 9370 Fields Ertel Road.
Offering window and drop-off service:
Florence branch, 7101 Turfway Road.
Main post office, 1623 Dalton Ave., Queensgate.
Fairfield branch, 700 Wessel Drive.
"It never lasts long in savings. We're always making a purchase," said Shelly, who runs a computer business from home.
"It's like an extra Christmas present. We look forward to it every year."
The Kelleys are not alone. More than six in 10 Greater Cincinnati residents either have already received or are expecting federal tax refunds this year, and 58 percent of those expect more than $1,000, according to a poll conducted Monday by SurveyUSA for the Enquirer and WCPO-TV.
More than three-quarters of respondents will spend at least some of their refund, and 55 percent of those will use it to pay off bills, the survey showed. The telephone survey included between 243 and 500 adult respondents, depending on the question.
Retailers and economists say that when consumers spend their tax refunds, it can stimulate economic growth. But other experts point to high debt levels among American consumers and advise them to pay off credit cards and other debt.
"Tax time provides a big boost to retailers during a traditionally slow time of the year," National Retail Federation president Tracy Mullin said. "Though some consumers will choose to spend their refunds while others plan to save, these tax refunds will ultimately put consumers in a better position to spend, now and in the future."
The local numbers are similar to national figures from a survey released by the National Retail Federation. About two-thirds of those nationally expect a tax refund. But more than three-quarters of those reported that they would use their refund checks to either pay down debt or add to their savings.
IRS figures show that the average refund as of March 5 was $2,182, up 4.4 percent from last year, the NRF said.
Kelley said she has used past tax refunds to pay off bills, but the family doesn't have credit-card debt to pay this year. She and her husband contribute to a retirement plan and already are setting aside money for their children's education.
"What we try to encourage them to do is put it in a retirement plan, put it in an IRA, put it in a 529 account for their kids' education or pay down credit-card debt," said Crystal Faulkner, a partner at the downtown accounting firm Cooney, Faulkner & Stevens LLC.
Faulkner said any savings plan contributions not only save for the future but also have current tax advantages.
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