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