Five Smart Things You Should Be Doing With This Year's Tax Refund
March 2, 2018
By Sonia Locke
Personal Banker & Mortgage Lender
Tax season is in full swing. And while the thought of having to file taxes might make you groan, the thought of receiving a tax refund brings excitement — and dreams of how to spend it.
According to the IRS, the average tax refund last year amounted to $2,895. But before you run out and buy that new big screen TV, think about some of the smarter ways to get the most out your tax refund. Here are a few ideas:
1. Pay down debt.
This may not be the most exciting option for a tax refund, but taking steps toward reducing debt is never a bad idea. Whether you’re paying off credit card balances, a car loan, or making an extra mortgage or student loan payment — paying your debts off now means paying less of your monthly income in the future.
2. Put it in an emergency fund.
It’s generally recommended to have between 3-6 months' worth of income saved up in an emergency or rainy day fund, just in case you ever need it. Don’t have that much in savings right now? Your refund can get you closer to that number!
3. Invest it.
If you can keep from letting that tax refund burn a hole in your pocket now, investing that money for later will likely grow your amount, and give you more money to use in the future.
4. Use it for a large home expense.
Every homeowner has one: a house project list, full of home repairs or renovations to complete. Those projects can be costly. Applying your tax refund toward a home project can help you get something crossed off your to-do list — and add value to your home at the same time!
5. Donate it to your favorite charity.
If you are comfortable with your savings, debt and investments, and don’t have a large project you want to complete, using your tax refund as a charitable donation can allow you to support a cause that is close to your heart. You might even be able to receive a charitable tax deduction next year, meaning you will owe less on your 2018 taxes. For more information on that, we recommend you contact a trusted tax adviser.
When Will You Get Your 2017 Tax Refund?
In general, the IRS says you can expect your tax refund within three weeks (21 days) of the day you file. However, there are other factors that could possibly delay your return.
Other factors that could delay your tax refund
- Your filing method. For people who file by physical mail, the process can take longer – which is why the IRS and tax professionals strongly encourage you to file electronically.
- Whether you request direct deposit, or a paper check. Receiving a paper check from the IRS generally takes longer.
- How early you file. The later you file, or the closer you are to the April 17 filing deadline, the longer it may take you to receive your payment.
- If your return had errors. Any mistake or discrepancy could lead to your tax return taking longer to process than others.
Want to learn more?
We’d love to meet with you. Set up an appointment today with one of our financial professionals at Security National Bank, to discuss ways we can put your 2017 tax refund to work for you.