Smart Ideas for Spending an IRS Tax Refund
After paying the government all year long, many taxpayers will see some money coming their way now that it is tax refund time. Even better is the fact that tax refunds have been on the rise over the past several years. The average tax refund check has risen from $2,371 in 2009 to $2,893 in 2015. However, before these funds are used to pay for an expensive vacation or a finance a wild spending spree, it might be wise consider some of the following smart ideas for putting your IRS tax refund dollars to work:
- Invest in your home. Has your leaky roof been worrying you? Has your garage door not been working as well as it used to? First things first! Since your home is often the largest investment you have, it might be wise to use tax refund money to take care of home repairs and even some upgrades. Your tax refund is a nice chunk of money that is not part of your ordinary household budget and may very well be enough to take care of most minor home maintenance issues. You may be even able to get that fresh coat of paint on the outside of your house that you have been wanting to get for years! Being proactive about taking care of your home will usually save you money in the long run and is nearly always a good investment decision.
- Get a home energy audit. Investing in a home energy audit is actually an excellent way to use tax refund Such an audit consists of hiring a professional to come into your home to assess energy consumption and suggest ways of making the home more energy efficient. After the inspection, the professional will issue a report suggesting such energy saving measures as sealing holes and adding insulation that can potentially result in significant savings on utility bills for years to come. Although a home energy audit can cost anywhere from $50 to a few hundred dollars, it is an investment that will more than repay itself over time. Go to https://energy.gov/public-services/homes/home-weatherization/home-energy-audits for more information on this money saving measure.
- Contribute to your retirement account. Most individuals have access to some type of employee sponsored retirement plan such as a 401(k), a 403(b) or a 457. Even if you are already contributing to such a plan, your scheduled monthly contributions may not equal the maximum yearly contribution which is $18,000 ($24,000 for individuals over 50). If this is the case, you can use your tax refund to make a one-time contribution. This is an especially wise spending choice if your yearly contributions are under an amount matched by your employer. Similarly, if you are not working for a company that offers one of these retirement plans, you can use your tax refund dollars to contribute to a traditional IRA. Both of these investment choices defer taxes on the money in the year in which it is received and are a great way to boost savings since they allow the money to grow over time.
- Invest in your career or education. If you want to get ahead in your career, your tax refund is a great way to invest in yourself. Take those extra college courses you have always wanted to take or enroll in a continuing education program. Although these educational opportunities may cost as little as a few hundred dollars, they can enhance your career skills and increase your earning potential. Weekend conferences may be another worthwhile career investment. There are actually numerous ways that tax refund dollars can be put to good use to advance a prudent taxpayer in their chosen field. Sometimes a little money up front goes a long way toward increasing future earnings!
- Take care of everyday items. Do you need new tires? Is there some dental work you have been putting off? It may be a good use of tax refund dollars to take care of these types of chores, before they catch you off guard. Then maybe, if there is anything left after you have made an investment in your future, you can spend a little of your tax refund frivolously!
If you have tax questions or a tax debt you are unable to pay, our tax settlement professionals are happy to discuss your tax resolution options free of charge. For more information about our services, visit us today at www.professionaltaxresolution.com or call us at 877.889.6527. With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which settlement option will be the best fit for your specific