Tax Refund Dos And Don'ts
Tax season might seem like a daunting time of the year. Collecting all of your receipts from the previous year and filling out several forms can make filing your taxes a tedious process. Fortunately, there’s a silver lining in this process: a tax refund check.
Although the law says that you have to file your taxes yearly, there is no law that says that you have to spend your tax return. There are better ways to make that money work for you. Read below for some alternative ways to spending your tax return:
DON’T spend your refund beforehand- Don’t make the mistake of making credit card purchases thinking that you will pay yourself back when you receive your check. You will end up spending more than you should and putting yourself in debt.
DO save your refund- You can contribute towards your savings account, or open an account if you don’t have one. By doing so, you will be prepared for any unexpected expenses without having to rely on your credit cards.
DON’T borrow against your expected refund- Avoid any refund-anticipation loans that gives you a cash advance before your refund arrives. Although you get your money sooner, they don’t come cheaply and if, for some reason, the refund is held up or denied by the IRS, you still owe on the loan.
DO clear or reduce your debt- If you have any unpaid loans or credit cards, it’s a good idea to use the refund money to make payments on your debts. You can save a lot of money by using your refund to paying down your high-interest credit cards and loans.
DON’T make impulse purchases- A new entertainment system would be great in your home, but it doesn’t add any value to your home. Practice self-control, and it will prevent you from spending your entire check on things you don’t need.
DO improve yourself- Take a class or use the refund money for other personal improvements, especially ones that provide you with the skills to get a better job.
DON’T loan money to friends- Your tax refund check may put you in a generous mood. Avoid becoming an ATM for your friends, or you risk losing all of your money.
DO update your appliances- Minor upgrades such as investing in an energy-efficient cooling system or adding insulated windows and doors can save you hundreds of dollars a year.
More than 153 million individual tax returns will be filed this year, but before you get started you need the right information. 1st Bergen Federal Credit Union is a not-for-profit financial institution, whose focus is serving the financial needs of its members rather than making a profit. Stop by the branch to talk about ways 1st Bergen can help you save or invest your tax refund so you can make the most out of your money.
1st Bergen FCU members can also take advantage of our partnership with TurboTax and save on federal income tax services. To access the promotion, CLICK HERE.
For more information or to join 1st Bergen FCU, go to our website at www.1stbergen.com, or visit our branch in Hackensack.