Tips on how to spend your Income Tax return!
It’s a first of the year bonus we all look forward too! I’m speaking about those who get a return and I will give tips on those who don’t also. We wait for those W2’s to come in the mail and can’t wait to plug them into the sheet and see what the return is going to be. But now what? Let’s talk about some realistic options you can do with your tax return.
Pay off a bill
Do you have a nagging doctor bill, credit card bill, or something that would be such a stress relief to pay off? Pay it! Of course you always want to pay off something that accrues interest first versus a doctors bill that doesn’t accrue interest. Stop the madness and stop paying interest. Plus it will free up some money for you monthly to get that burden off your back. I would say this is the number one choice when it comes to deciding what to do with your tax return.
Maybe you are a business owner, home owner, or work from home? Take that return and reinvest it into your business. You can invest in things like marketing, materials or even hiring an employee. Or has there been a capital project at your home that needs attention, finally tackle that repair. Make sure you save those receipts so you can potentially write them off for next years tax return.
Some people wait for their return to make a major purchase so they can pay all in cash or just finance a partial amount. Like buying a new vehicle would be a number one purchase that people often do. Also another idea is to book a family vacation so it would be paid in full. It’s nice to look forward to something brand new or fun!
Yes, there is always the smart idea of putting it into a savings or retirement account. You can contact your local bank and schedule an appointment to talk to a financial planner what type of savings or investment works best for your situation.
No tax return?
That’s ok, that happens too. But there are things that you can do to prepare for that. If you have to pay taxes annually you can put aside a certain amount monthly into savings to prepare. That way you are saving for that payment all year round and it won’t come as a shock to you to pay it. Also make sure you are having the maximum amount taken out of your paychecks in taxes. And also maximize your write offs and benefits.
I hope these tips help you and organize your thoughts. I wish you all great tax refunds and that you get some financial relief from it.
Disclaimer: I’m not a tax professional but just have some real life tips for you! If you have questions about your tax situation I recommend seeking out a tax professional to help you.