Nearly half of Americans prepare their own taxes, according to a new survey, and most of them seem to be convinced they are taking advantage of all the tax breaks available.

That’s not necessarily the case, though, as any tax professional would tell them. The survey, by BMO Harris Financial Advisors found that 48 percent of the U.S. taxpayers polled said they prepare their own tax returns.

The overwhelming majority of them (83 percent) said they are confident that their completed tax returns will take advantage of all of the tax deductions, tax credits or other tax savings that may be available to them.

However, 45 percent admitted they are not so knowledgeable about investments designed to reduce their overall tax liability, such as protecting their investments from a tax perspective and transitioning them in a tax-efficient manner to the next generation. Only 44 percent of the respondents indicated they understand how capital gains are taxed, and 47 percent of them said they understand how dividend income is treated from a tax perspective. 

“There’s a sense of confidence this tax season as Americans across the country prepare their tax returns in advance of the April 15 filing deadline,” said BMO Harris Financial Advisors president Mike Miroballi in a statement. “However, it’s critical that people have an appreciation of and basic knowledge about how tax rules impact all their assets, including their investments. If you want to ensure you’re getting the maximum return from your investment portfolio, you need to be aware of the range of tax-smart options that are available to you. Moreover, before you make an investing decision, take some time to understand how it could be impacted from a tax perspective before you commit.”

The survey also asked taxpayers how they plan to use their tax refunds. Of those expecting a refund for 2013, more than 40 percent plan to use the money to pay household bills and/or reduce their overall debt load, including their credit card balances and other debt besides their mortgage. In addition, 35 percent of the respondents said they would save or invest their tax refunds, while 16 percent plan to use the money to fund their vacations or purchase leisure items. Another 13 percent plan to spend the tax refund on renovations, while just under 10 percent said they intend to donate their tax refunds to charitable causes. Another 8 percent have decided to use the refund to pay down their mortgages.  

“While everyone’s financial priorities and situations are different, I’m encouraged that so many of us who are expecting a tax refund will use the money to cover basic expenses, reduce their overall debt and/or save and invest for the future,” said Miroballi.