How to Retire on Your Tax Refund
There are few things that feel as good as getting a tax refund from the IRS. In fact, the average return comes in at just over $3,000. That’s a significant chunk of change and there are so many possibilities for how to use it! You can pay off debt, splurge on a vacation, put a down payment on a new car, simply deposit it into your savings account…OR…
Consider a long-term investment for your refund
There is another option that you should consider with your refund, which could set you and your family up for future financial freedom. Investing your refund in a retirement account is one of the smartest things you can do with your tax refund. In fact, if you invest that $3,000 refund into an IRA, it could grow to over $20,000 in 40 years. $20,000! That is with minimal work on your part. And, just think about what your balance would look like if you invested your refund each year for 5-10 years!
If you do not yet have a retirement account, the tax benefits could be even bigger for you. You can actually take an immediate deduction if you open a traditional IRA. That’s like free money! You should keep in mind that there are restrictions on how much you can contribute each year – but these limits are significantly higher than the average refund.
This opportunity only happens once a year
One thing you should remember when you are deciding how to spend your refund is that you receive a refund from the IRS for overpaying on your taxes in a particular year. So, in a sense, the IRS has been holding (or saving) your money and is giving it back to you in the form of a tax refund. So, try not to think of this money as money that can be spent frivolously. Most Americans do not have a nest egg in their savings account or contribute enough to their retirement, so use your tax refund as an opportunity to save for your future. This opportunity only presents itself once a year so take it!
Success Tax Relief can help you plan for the future
Success Tax Relief is a full service tax firm that has been helping our clients with their taxes for more than 30 years. The tax professionals on our team can help you get the largest possible refund from the IRS each year. We help our clients with routine tax preparation as well as audit preparation, applications for installment agreements and offers in compromise. We offer expert advice and strong customer service. In addition, we have experience working and communicating directly with the IRS, so you can rest easy knowing that Success Tax Relief is working for you. Contact us today and let us help you maximize your refund so that you can start planning for your future! There’s no time like the present!