Retail sales could get as much as a 10% boost in sales for March and April because they expect people who filed their taxes early to spend their refunds very shortly after receiving them.
From Deutsche Bank’s Joseph LaVorgna (emphasis ours):
The last full data set that we have is from 2007 and 2008 (for tax years 2006 and 2007) and in those years approximately 14M to 15M tax payers filed before February 2 with 12 to 13M refunds distributed by the IRS during that period. Hence, around 85% of “early filers” for the month of January received refunds and the average refund was approximately $3,000. The cumulative dollar amount of refunds paid out by the IRS in the first month of the year was approximately $39B. Assuming that the entire refund was spent in the same month, the delayed refunds would have accounted for almost 10% of total retail sales in January ($382B). Hence, in addition to a potential weather-related snapback in February, a glut of refunds for “early filers” could also boost sales.
Anecdotal evidence from corporate management teams also pointed to some impact at retailers during this time period.
Deutsche also cited a TurboTax survey that said 82% of early filers’ main reason for filing early is because they have to make a debt payment or a large purchase.