Depending on what state you live in, the average IRS tax refund is between $2300 and $3300. With this kind of cash infusion, it’s tempting to thank Uncle Sam and then blow a bunch of money on entertainment. However, savvier citizens know that saving or investing your refund can turn it into a gift that keeps on giving. Below are four uses for your tax return that you won’t regret later on.
Home Improvement
Unless you pass down housing through your family, your home is an investment. When you move or pass away, you want to be able to sell it for a profit, and some relatively cheap improvements could significantly increase its market value. Spending tax return money on your handyman could financially benefit you or your family in the long run.
Insurance and Warranties
Everyone’s clumsy sometimes, and you can make smarter decisions as a consumer if you identify the valuables that you are most likely to break or lose. Extended warranties are available for everything from bikes to laptops, and spending some of your return insuring your at-risk possessions could save you big money down the road.
Bulk Purchases
Almost everything is less expensive if you buy a lot of it at once. This principle can turn your tax return into huge savings on consumer goods. Spending a few hundred on well-planned bulk purchasing of household commodities like paper towels and detergent could cut your grocery bills by around 50%.
Next Year’s Taxes
It’s the biggest bummer of any of these options, but it might be the most logical. Your tax return could easily become $2300-$3300 that you won’t have to pay out-of-pocket next time April 15 comes around. Alternately, you could put some of the money toward hiring a CPA to make next year’s taxes easier.
All four of these strategies have something in common – they turn your extra money into even bigger savings. TalkLocal can also help you with that by connecting you to an accountant to make some of those options not only savvy, but simple.
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