5 Responsible Ways to Spend Your Tax Refund
For those who have filed their annual taxes electronically, you may have already received your tax refund! For those who prefer to do it the old-fashioned way to avoid electronic filing fees, your tax refund might be coming in the mail any day now! Then there are the late-filers and not to mention those who may have filed on time, but due to minor discrepancies, may have a delayed filing, thus a delayed check. At any rate, this is usually the time of year when those checks start coming in the mail if you didn’t select for direct depositing.
Tax refunds are looked at by some as free, or even extra money. The reality of tax refunds is that it is actually money that the government borrowed from YOU. It is money that is rightfully yours.
The way this works, is that the Internal Revenue Service (IRS) assess how much money should be taken out of your wages based on your total annual earnings, and household status. Oftentimes, the IRS takes out more than they should and trues up around the tax season. Some people owe money and others might be issued a refund.
For those who are lucky enough to receive a refund, the tax experts at Success Tax Relief want to provide you with 5 smart ways that you can spend your tax refund.
- Pay Off the Smaller Debts
There might be some outstanding credit card debts that are hanging over your head and you may only be able to pay the minimum amount just to keep the collectors at bay. Use this opportunity to pay off your credit cards and either shred them or put them away for emergencies only.
- Don’t Spend the Tax Refund
So often, it’s easy to want to go out and spend your refund as soon as you get it. This year, try doing absolutely nothing with it. Deposit it in your savings account and go on with business as usual. You’ll have the comfort of knowing that you have a nice cushion of savings in your bank account whenever you need it.
You don’t necessarily have to be a broker to invest your tax refund. Go to your local bank and set up an appointment with a retirement consultant to guide you in making affordable short or long-term investments.
- Use Your Federal Refund to Pay State Taxes
It’s easy to get so consumed with your federal tax filings, that you might forget that you have state tax responsibilities. It’s not uncommon to get a federal refund and owe the state. In such cases like this, be sure to budget some of your federal refund to go toward your state filing fees.
- Have Some Fun!
Not everything has to be business all of the time. You work hard and deserve to treat yourself. You can also be smart about it. Use half of your refund to take care of any financial obligations and the other half can be used toward a vacation.
The way you spend your tax refund is ultimately up to you. Only you know what you’re your financial obligations are. If you are in need of tax relief and are expecting a federal refund, call Success Tax Relief today at 877-825-1179.