8 Smart Ways To Use Your Income Tax Refund

Or fixing something that has been broken and was just over-budget. Maximizing your enjoyment in the home is a worthy investment for your tax refund. Some people feel 8 Smart Ways To Use Your Income Tax Refund apprehensive to begin investing because they don’t have the funds to begin, but a tax return can allow them to start the process and accumulate interest over time.

If you have debt, your tax refund can provide an opportunity to reduce what you owe, taking some of the pressure off your future finances. If your refund isn’t enough to eliminate a debt entirely, you may want to consider refinancing the debt so that your extra payment goes farther. Not all investments are about the future price of a home, but about making it a better fit for your family.

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Likewise, if you already have a business and your equipment is getting kind of rusty, or your website could use some help from a designer, that’s also a smart way to invest your money. If you’re using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until nearly 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee. Your refund won’t be enough to redo your kitchen or bathroom, but it can pay for some smaller home improvements.

If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly. With tax return season around the corner, several businesses are vying for your tax return money and enticing you with incentives for purchases you may not usually make. In many cases, you may find yourself with a larger sum of money than you typically have at one time, and it’s important to consider ways to use your money effectively.

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For many people, their IRS tax refund is the biggest check they receive all year, the IRS says. In anticipation of your windfall, it’s wise to have a plan for how you’re going to use your windfall.

  • Receiving your tax refund gives you a perfect opportunity to donate money to a cause that’s close to your heart.
  • While we adhere to stricteditorial integrity, this post may contain references to products from our partners.
  • Here, we offer eight ideas for ways to make the money work for you.
  • Many or all of the products here are from our partners that pay us a commission.
  • If you’re fortunate enough to have the essentials covered, you may be tempted to treat yourself to dinner at your favorite restaurant or a nice bottle of wine.

Tax season is upon us, and for many, that’s actually good news. With the economy in a hole as a result of the coronavirus pandemic, our personal finances have taken a hit, as well.

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Tech stocks carried the market on its nearly decade-and-a-half bull run before they were frozen out at the end of last year as traders switched to seemingly more recession-resistant names. Among the dozens of stocks to enact splits this year are two industry leaders that scream value and one cash-rich company that’s clobbering its shareholders. We believe everyone should be able to make financial decisions with confidence. The national average APR is around 17%, but some cards may charge even more on any balance you carry month to month. “The Roth generally makes sense if you think you’re going to be in the same tax bracket or higher in retirement,” Meyer said. But paying down the debt that accrues the most interest would make the most sense because it would reduce your overall payments.

  • Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.
  • Whether you already have a growing retirement account or have not begun to save, the benefits of compound interest cannot be overstated.
  • Heidi Rivera is a Puerto Rico-based personal finance reporter.
  • Socking away money in an IRA may lower your tax bill, and it increases your retirement security.
  • Make a list of the jobs that need tackling around your home, and use the refund money to pay for materials .
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  • If you have debt, your tax refund can provide an opportunity to reduce what you owe, taking some of the pressure off your future finances.

So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Whether you’re making payments on a car loan, education loan, mortgage or high interest credit cards, use your refund to make a dent in what you owe. Whether it’s https://turbo-tax.org/ a home repair, auto repair, a layoff or unexpected bill, having cash set aside will ease the financial burden. We recommend three to six months of readily accessible savings in the event of an emergency. If you don’t have a rainy-day fund, don’t procrastinate; get started today.

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How can I get a bigger tax refund?

  1. Rethink your filing status.
  2. Embrace tax deductions.
  3. Maximize your IRA and HSA contributions.
  4. Remember, timing can boost your tax refund.
  5. Become tax credit savvy.

You might start off with the card with the lowest balance first. Wiping the slate clean on a card or cards is a big psychological win and will encourage you to stay in the battle until you are out of debt. That’s why he recommends using a portion or all of your refund in a savings account. Having three-to-six months’ worth of expenses saved up is typically the go-to rule for anyone in the personal finance industry.

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Things that you didn’t plan to save money for and can’t avoid paying. Keep in mind that your investments are not protected by the Federal Deposit Insurance Corporation like checking and savings accounts are. Passing money you use in the short-term through the account saves you roughly 25% on all your medical costs.

8 Smart Ways To Use Your Income Tax Refund

Receiving your tax return is exciting, especially if you want to boost your financial health. No matter how much you are expecting to receive from the IRS, there are strategic ways to invest your tax return to support your current and future finances.