What To Do To Maximize Your Tax Refund
If you were one of the millions of taxpayers who received a sizable refund check this year, think twice before heading to Las Vegas.
Experts say that too many citizens tend to waste their refund money and end up regretting it.
Instead, think about some of the ways in which you could put that cash to good use.
Besides just socking it away for a rainy day, consider paying off high-interest credit card balances or adding to your IRA.
These are two of the best things to do with a refund because you get a double effect of sorts, in the form of future savings.
In addition, many people look to their refund as a source of tax relief because they use the money to defray next year's anticipated tax bill.
If your refund is very large, it might be a good idea to speak with your accountant and adjust the withholding amount.
That way, you get instant tax relief through a larger paycheck.
Next year you will not get as large a refund as this time around, but your checks will be bigger all year long.
Education and investment are two other popular places where tax refund money migrates.
Parents can set up educational funds for their kids or create a stock investment account with a brokerage.
Depending on your specific situation, either of these arrangements could provide future tax relief.
Dollars that grow, tax free, for a child's education are one of the benefits of educational funds.
On the other hand, stock accounts can yield solid returns when diligently handled.
If your refund is over $3,000, you might consider splitting it up and taking advantage of several different financial paths.
Think about using your refund to prepay next year's vacation.
In that case, you won't have to rely on credit cards or other borrowing in order to enjoy a week or two at the beach.
It is as simple as setting up a separate account at your bank and designating it "vacation fund.
" Don't forget to deposit your tax refund check into the account! Two more popular ideas are home improvement and charitable giving.
Even these choices lead to tax relief.
By investing in your home, you create an asset that will be worth more in the future.
In fact, many energy-related home improvements are tax deductible, while chartable giving is always deductible for those who itemize.
There are many options to maximize your refund this year, and most just take a bit of thought and planning to make them happen.
Experts say that too many citizens tend to waste their refund money and end up regretting it.
Instead, think about some of the ways in which you could put that cash to good use.
Besides just socking it away for a rainy day, consider paying off high-interest credit card balances or adding to your IRA.
These are two of the best things to do with a refund because you get a double effect of sorts, in the form of future savings.
In addition, many people look to their refund as a source of tax relief because they use the money to defray next year's anticipated tax bill.
If your refund is very large, it might be a good idea to speak with your accountant and adjust the withholding amount.
That way, you get instant tax relief through a larger paycheck.
Next year you will not get as large a refund as this time around, but your checks will be bigger all year long.
Education and investment are two other popular places where tax refund money migrates.
Parents can set up educational funds for their kids or create a stock investment account with a brokerage.
Depending on your specific situation, either of these arrangements could provide future tax relief.
Dollars that grow, tax free, for a child's education are one of the benefits of educational funds.
On the other hand, stock accounts can yield solid returns when diligently handled.
If your refund is over $3,000, you might consider splitting it up and taking advantage of several different financial paths.
Think about using your refund to prepay next year's vacation.
In that case, you won't have to rely on credit cards or other borrowing in order to enjoy a week or two at the beach.
It is as simple as setting up a separate account at your bank and designating it "vacation fund.
" Don't forget to deposit your tax refund check into the account! Two more popular ideas are home improvement and charitable giving.
Even these choices lead to tax relief.
By investing in your home, you create an asset that will be worth more in the future.
In fact, many energy-related home improvements are tax deductible, while chartable giving is always deductible for those who itemize.
There are many options to maximize your refund this year, and most just take a bit of thought and planning to make them happen.
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