Each year, the majority of taxpayers get refunds. And while some families living paycheck to paycheck depend on these refunds to make ends meet, many of us view it as a source of fun money. (Ever wonder why there are so many sales on large-screen televisions and electronic gadgets during tax season?) The IRS issued more than 59 million refunds last year with an average refund of $3,000. If you’re getting a sizable refund, here are a few ideas for doing things a bit differently this year:
Take steps to avoid a big refund. A big refund usually means that you have had too much money withheld from your paycheck. If you adjust your withholding now (we can help with that!) you’ll get more money in your paychecks throughout the rest of year instead of a refund when you file your taxes in 2014.
Reduce credit card debt. Even many families that do all the other right things – such as save for emergencies and retirement – can be guilty of letting credit card debt accumulate. You may want to consider using your tax refund to jump-start your efforts at paying off the balances on your credit cards so you can stop paying double digit interest rates.
Fund your retirement. Using a refund to establish or add to an IRA can be a smart move, especially if you’re a bit behind in your retirement savings.
For other ways to use your tax refund, check out this list.
