Put Your Tax Refund to Work for You ======================= The IRS recently published statistics on the 2013 tax filing season. During 2013, the IRS issued over 109 million tax refunds totaling almost $300 billion. The average refund was $2,744. If youre one of the millions of taxpayers who get a refund every year, consider using it this year to improve your financial situation. Everyones needs are different, but here are some suggestions. * If you have a 401(k) plan at work, contribute your refund. If your employer offers a matching contribution, thats an immediate return on your money in addition to the upfront tax deduction. And funds in the plan grow free of tax until withdrawal. * If you want to earn a guaranteed double-digit return, use your refund to pay down credit card balances. * Consider investing your refund in your childs education. Both Section 529 college savings plans and education savings accounts offer tax-advantaged ways to save for college costs. * Make sure youre taking full advantage of your IRA options for retirement savings. Both traditional and Roth IRAs give you tax-free growth of earnings. * If youve maximized your retirement and education savings, and your credit cards are under control, put your refund in diversified investments that make sense for your age and financial situation. * Ask yourself if getting a big refund every year is a smart idea. Wouldnt you rather invest your money during the year instead of making an interest-free loan to the government? Consider filing an updated Form W-4 with your employer. For details or assistance, give us a call.
Posted on: Tue, 11 Mar 2014 13:54:10 +0000
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