Why You Shouldn't Get a Tax Refund

A tax refund is the amount of money you over pay in federal or state taxes or both each year.  A tax refund is just another way to help the government make money.  The money each taxpayer pay during the year is put into a high interest bearing account and the government keeps the interest.  The money given in tax refund is small compared to the money earned each year from the millions of taxpayers in the U.S. 

There are only a few instances when you should overpay: if you are trying to pay down debt or want to pay off your mortgage or car loan off faster. You are forced to pay taxes and there is no way around that.  If you work hard all year long why do you make yourself wait to get back money you earned?  You can get your money upfront by adjusting your tax withholdings throughout the year.  Consult a tax professional to make sure don’t end up owning money at the end of the year.

Unfortunately, many Americans get excited when they find out they are getting a tax refund.  However, for many Americans getting a tax refund means it will be spent as soon it is received.  If you are struggling to pay bills or need to get out of debt your tax refund can be a lifesaver.  But, it is up to you to determine how to spend it.  If you do get a tax refund this year here are 8 smart ways to spend it but start now by adjusting your tax withholdings so you can get more money in your paycheck this year.

1. Get current. If you are behind on any bills, use the money to catch up.  Make sure you get current on all utility bills and car payments and your mortgage.
2. Pay down debt.  Pay off collection accounts, judgments, and liens first, and then pay down current debt.
3. Create an emergency fund.  Create a savings account to cover your monthly expenses for 9-12 months.
4. Invest it. Start a retirement account.  If you don’t have a retirement account with your employer sign up tomorrow.  You can also start you own individual retirement if your employer does not offer one.
5. Save for your children's college education. If you haven't already done so start saving for your children's college education.  College tuition increases at 3 times the rate of inflation.  Put the money in a 529 plan or comparable college savings plan.
6. Purchase a home. Now is a great time to buy a home because interest rates are low.  Use the money to put towards down payment and closing costs.
7. Increase job skills. Take an inexpensive class to boost your skills at work. This can help you find a job or increase your chances of staying employed.
8. Donate. Make a tax deductible donation which you can write off on your taxes next year.

Stop Getting a Tax Refund

A tax refund is the amount of money you over pay in taxes in each year. A tax refund is just another way to help the government make money. The money each taxpayer pay during the year is put into a high interest bearing account and the government keeps the interest. The money given in tax refund is small compared to the money earned each year from the millions of taxpayers in the U.S.

There are only a few instances when you should overpay: if you are trying to pay down debt or want to pay off your mortgage or car loan off faster. You are forced to pay taxes and there is no way around that. If you work hard all year long why do you make yourself wait to get back money you earned? Get your money upfront by adjusting your tax withholdings. Consult a tax professional to make sure don’t end up owning money at the end of the year.

Unfortunately, many Americans get excited when they find out they are getting a tax refund. However, for many Americans getting a tax refund means it will be spent as soon it is received. If you are struggling to pay bills or need to get out of debt your tax refund can be a lifesaver.

But, it is up to you to determine how to spend it. If you do get a tax refund this year here are 8 smart ways to spend it but start now by adjusting your tax withholdings so you can get more money in your paycheck this year.

1. Get current. If you are behind on any bills, use the money to catch up. Make sure you get current on all utility bills and car payments and your mortgage.
2. Pay down debt. Pay off collection accounts, judgments, and liens first, and then pay down current debt.
3. Create an emergency fund. Create a savings account to cover your monthly expenses for 9-12 months.
4. Invest it. Start a retirement account. If you don’t have a retirement account with your employer sign up tomorrow. You can also start you own individual retirement if your employer does not offer one.
5. Save for your children's college education. If you haven't already done so start saving for your children's college education. College tuition increases at 3 times the rate of inflation. Put the money in a 529 plan or comparable college savings plan.
6. Purchase a home. Now is a great time to buy a home because interest rates are low. Use the money to put towards down payment and closing costs.
7. Increase job skills. Take an inexpensive class to boost your skills at work. This can help you find a job or increase your chances of staying employed.
8. Donate. Make a tax deductible donation which you can write off on your taxes next year.

Tax Refunds - Use It or Lose It

Many Americans get excited when they find out they are getting a tax refund. However, for many Americans in this economy getting a tax refund means it will be spent as soon as you get it. If you are struggling to pay bills or need to get out of debt your tax refund can be a lifesaver. But, it is up to you to determine how to spend it. Many Americans spend money frivolously and don't really think about their future. Here are 7 smart ways to spend your tax refund and improve your financial life.


1. Get current. If you are behind on your mortgage payment, use the money to catch up. Make sure you get current on all utility bills and car payments.

2. Downsize. If you are in a house that is upside or have a luxury car, downsize. If you are unable to downsize your home consider renting out one or two rooms. You can make a lot of extra money renting out a room in your home. Consider selling your car and buying a used car with no car payment or that costs $5,000 or less.

3. Borrow. Ask family or friends if you can borrow money to help get caught on your mortgage and utility bills. Your main focus is to keep a roof over your head and food on your table. Once you get current on household bills, then you can use any extra money to pay down debt and other bills.

4. Extras. Cancel your internet, long distance, cable service and magazine and newspaper subscriptions. If you absolutely have to have internet and cable service get the cheapest plan possible and call continually to ask about specials.
5. Eating. Skip eating out and buying fast food because you don't feel like cooking. Cooking at home can save you lots on your grocery bill. Buy more fresh fruits and vegetables instead of starches and processed food to save money. Also, use coupons, buy items on sale, buy in bulk or shop at wholesale stores. You can also change your eating habits. Meats are the most expensive items at the grocery store so consider buying cheaper meats, instead of steak buy pork, instead of pork buy turkey, seafood or chicken.

6. Sell. Go through your entire home and if you find anything in your home that has not been used by you or any of your family members in the past 6-12 months, donate the items to charity. You can later write the donations off on your taxes. You can also have a yard sale to get extra money.

7. Buy used. Many people believe the hype from advertisers that you can only get good quality items if they are bought new. Now true. You can visit websites such as freecycle.org and find items that are used for free. That's right free. You can also buy used items on eBay and Amazon.

I hope these tips help you slash your budget and work towards improving your financial life.

8 Ways to Use Your Tax Refund

This time of year is when many people file their taxes in hopes of getting a tax refund. A tax refund is free money you get back when you file your taxes. A better way to get your tax refund is to increase your tax withholdings and get your money back during the year.

Getting your tax refund at the end of the year helps the IRS make money but may not help you as much as you think. Some people are not very disciplined and when they get a large sum of money them don't spend it wisely. In some cases they are worse off with the tax refund than they were before they got the refund.

Don't make that mistake. Use your tax refund wisely and improve your financial situation. Do even better next year than you did this year. Here are 8 ways to spend your tax refund.

1. Pay down debt. Pay down credit card balances first, then pay collection accounts, judgments, liens, then pay extra on any loans.

2. Create an emergency fund. Create a savings account to cover bills for 9-12 months.

3. Invest it. Start a retirement account. If you don’t have a retirement account with your employer sign up tomorrow. You can also start you own individual retirement account in addition to your employer account.

4. Save for your children's college education. If you haven't already done so start saving for your children's college education. College tuition increases at 3 times the rate of inflation. Put the money in a 529 plan.

5. Purchase a home. Now is a great time to buy a home. Use the money to put towards down payment and closing costs.

6. Repairs. If your home need major repairs use the money to fix them.

7. Increase job skills. Take an inexpensive class to boost your skills at work. This can help you find a job or increase your chances of staying employed.

8. Donate. Make a tax deductible donation which you can write off on your taxes next year.

Another way to get a tax refund is to check to see if you have an unclaimed refund from a previous tax year. Contact the IRS for more information at irs.gov.