|Most people — 61 percent according to a poll by TD Ameritrade — intend to save or invest their tax refund. But a few extra hundreds or thousands of dollars in-hand can make refund recipients feel like they’re allowed to splurge a bit.
“You also find significant spending among households who say they’re saving [their tax refund],” said Jonathan Parker, a finance professor at MIT, in an interview with CNBC. Research shows that seeing extra funds in a bank account “actually caused spending even though you think you saved it.”
A program called SaveYourRefund was introduced last year by nonprofit group Doorways to Dreams to encourage tax filers, particularly those living on low income, to save at least a portion of their tax refund. “SaveYourRefund is an incentive-based promotion that encourages tax filers to save a portion of their refund and potentially win cash prizes,” according to the organization’s web site.
How to SaveYourRefund and Enter to Win
Those who choose to enter and participate in SaveYourRefund will have 101 chances to win, with a hundred weekly giveaways of $100 and one grand prize of $25,000.
To become a participant in SaveYourRefund, first file Form 8888 with your tax return to allocate part of your refund to save.
“Many Americans do not realize that the IRS has created a specific form built right into the tax filing process that enables all American tax filers to automatically save a portion of their tax refund with one simple step,” according to the giveaway’s site. “D2D Fund worked with the IRS and Treasury Department to create Form 8888, enabling this seamless and near universal opportunity to save.”
Using Form 8888, deposit at least $50 into a savings account, certificate of deposit, IRA, prepaid card, savings bond or Treasury Direct account. Then Enter the drawing for the weekly and grand prize giveaways by visiting SaveYourRefund.com/enter.
SaveYourRefund was started as a way to give Americans incentives to save and prepare for financial crisis. “The annual federal tax refund is the largest sum of cash many American households receive all year, often amounting up to 20% of annual household income,” the SaveYourRefund site reads.
“Each tax filer has a unique opportunity to set aside savings with an influx of cash at tax time. Tax time is also a moment when filers are primed to be thinking about their financial decisions.”