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What’s the Best Way to Use Your Tax Refund?

April 12, 2021
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When you got your tax return back from your San Antonio TX CPA this year, you may have discovered that you’ll be getting a refund. Before you spend that money, consider some ways to put it to good use.

By the way, if you get a large refund, you may want to adjust your withholding or your quarterly income tax payments so you can keep more of your money throughout the year instead of waiting for a refund. Ask your CPA for advice.

Meanwhile, here are some ways to use your tax refund to put yourself in a better position financially now or in the future.

  1. Pay down or eliminate debt. Why let interest payments eat up your income? Put all or part of your tax refund toward your credit cards, car payments, student loans, or even your house. Reducing debt will ease your monthly expenses and free up more income for other uses.
  2. Start or add to an emergency savings account. You should have at least 3 months’ ready cash in a savings or money market account. More is better if you’re self-employed or have one income.
  3. Contribute to retirement savings. Put your refund in an IRA or other designated retirement account and let it grow. By the time you retire, it should be worth more than the amount you put in.
  4. Get needed healthcare you’ve been putting off, like dental work or new glasses. Or purchase a gym membership or exercise equipment to improve your health long-term.
  5. Fund college savings for your children. Or use a windfall to take a class or specialized training to increase your income.
  6. Take care of household business. Get a will made, hire a financial advisor, take a personal finance course or purchase needed insurance.
  7. Invest in your small or medium-sized business with new equipment, networking memberships or conference fees.
  8. Share the love. Give a donation to charity or perhaps treat your family, friends or employees to a special event or outing.

Gonzales Group CPA can help you plan your small business taxes properly so you break even at tax time. We offer monthly accounting services for small and medium-sized businesses.

We’re accepting new clients! We welcome you to call Gonzales Group CPA at 210-366-9430 to schedule a complimentary consultation with an experienced San Antonio TX CPA.

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