Waiting on pins and needles to collect your tax refund check from the IRS? Have running list of things you cannot wait to buy once you get your money?
Not so fast! Tempting as it may be to use a tax refund for a shopping spree or weekend getaway, the smart move would be to save some, invest some and then use the rest on something fun.
While getting a tax refund might seem like a bonus, ultimately you want to strive to break even with the IRS every year. The fact that you’re receiving a refund in the first place means you had too much tax withheld — which amounts to an interest-free loan to the U.S. government. Talk to your CPA or Tax professional about adjusting you tax withholdings to better match your yearend tax liability for next year.
We do not provide tax advice, please talk to a tax advisor for tax advice on your specific situation.
Britt Castro, CFP® and Founder of Financially Wise Women
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