So, You Got a Refund?
15 Apr 2016
The tax year has come and gone and you get your usual refund. What do you do with it? Or, better yet, is it good to even get a refund? According to Bankrate.com, three out of four taxpayers received a refund of $3,000 in 2015! Although you may look at this a “windfall” or forced savings plan, you are essentially giving your money to the government as an interest free loan. I don’t mind a refund, but $3,000 seems a bit high to me. Changing the number of your exemptions on your W-4 or witholdings may help control the amount of the refund (please consult with your tax preparer at this point). What do most people do with their refunds? According to the same survey:
*31% of Americans will plan to save or invest it–You get a round of applause!
*28% of Americans will plan to pay down debt–Well, I cheer your decision on this as well!
*27% will spend it on day to day necessities–Do what you have to do.
*6% will splurge on shopping or a vacation–Good for you!
Whatever you do, I suggest if you have a hard time setting money aside regularly, increase your 401K contributions or open an IRA instead. This will go further in aiding your retirement than giving the money to the government for free. Although, I imagine they would disagree.
Cambridge and Premier Investments of Iowa Inc. do not provide tax advice.