TAX REFUND: TIPS FOR WHAT TO DO WITH ITApr 29th, 2012 | By Sharon Shaw Elrod MSW EdD | Category: Senior Finances
Tax Refunds Sent Soon
Those senior citizens who will be getting an income tax refund, federal and/or state, may be wondering what they might do with the money. You’ve already received your completed income tax return from your financial adviser a few days before the filing deadline, and the refund was automatically deposited into your checking account. It’s already there, and now you need to decide what to do with it.
Some Suggestions for Spending Your Tax Refund
- An option is to transfer it to an investment or savings account, adding it to what you already have. This choice will create additional interest for the future.
- If you have credit card or other debt, you can use the refund to pay down the debt. A friend has medical debt, and she plans to use her refund on that.
- Leave it in the federal government coffers to use on your tax liability next year; a note… the problem with this is that you don’t enjoy the use of the money or interest it might generate. The trade-off is that you know part of your tax liability for 2012 is already paid.
- If you don’t have particular need for the money, you can give it away. A grandchild who needs help with college tuition or living expenses… your favorite charity… the local food bank or homeless shelter… your church or synagogue… the options are endless.
- Invest in your home to produce future savings. Many of us know we could decrease the expenses in our home if we upgraded some appliances to more energy efficient ones, or made improvements that impact what we spend on utilities for heating and air conditioning.
- Spend the money on yourself. Take a trip. Buy new clothes. Spend a day at the spa. Splurge on a great meal at a fancy restaurant.
Remember, you are retired. Retirees can choose what we want to do. Throw the shoulda’s, woulda’s, coulda’s out the window. Choose what you want to do with your tax refund.