How do you plan to spend your tax refund?

Tax ReturnToday, January 20, 2015, marks the first day the Internal Revenue Service (IRS) will begin accepting and processing 2014 returns.

Filing taxes can be a stressful time of the year. People are often left wondering if they will owe a balance or receive a refund. Ultimately, you want to break-even – not owing any money or receiving any back. This way you have access to all of your money throughout the year. Breaking-even takes time and requires fine tuning your deductions and/or making estimated tax payments.

In any case, if you are receiving a refund, then you can take a sigh of relief. Make sure you file early and e-file in order to get your money back quickly.

According to the Internal Revenue Service (IRS), the average tax refund in the United States was $3034*. That is a nice lump sum to receive back. While most people may save their refund, some people do make purchases and pay off debt.

Below are a few wise ways to spend that tax refund:

– Pay  off debt (i.e. credit cards, student loans, car note)

– Put money in an IRA/401K account

–  Save a good portion in a high interest account for a rainy day

– Spend it on a much needed item (i.e. bed, transportation, coat)

– Spend a small of money to spoil yourself ( i.e. spa, night out, new bike)

How do you plan to spend your refund? Let us know in the comments.

* Statistics as of February 28, 2014.

Photo credit: Arvind Balaraman | Freedigitalphotos.net

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