Ways to Make Your Tax Refund Count

Ways to Make Your Tax Refund Count

Ways to Make Your Tax Refund Count

Tax season is here, which means that tax refunds will soon be sent out to American tax payers who qualify for a refund. No matter the size of your refund, you will want to maximize the money you get back as much as possible. Here are some ways to make the most out of your refund!

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Save for Emergencies

Prepare for unexpected situations by opening or adding to a savings account that serves as an emergency fund. This emergency account should hold about three to six months of living expenses in case of a sudden financial hardship like losing a job, replacing a car, or a medical emergency.

Pay off Debt

Use your tax return to pay down existing balances by chipping away at loans with the highest interest rates or eliminating smaller debt first.

Save for Future Expenses

This may include retirement, children's education, or health expenses. Open or increase contributions to a tax-deferred savings plan like a 401(k) or an IRA. You can also look into opening a tax-advantaged 529 education savings plan to ensure that your children's school expenses are covered when it is time for them to attend college. Saving for future health expenses by investing in a Health Savings Account is also a great way to use your refund.

Invest in a Savings Bond

The U.S. Treasury allows for savings bonds to be purchased using your tax refund for as little as $50. Savings bonds earn interest for a maximum of 30 years.

Invest in Your Home

Use your tax refund to invest in home improvements that will increase the value of your home. Improvements may include small, cost-effective upgrades like energy-efficient appliances, which will pay off in both the short and long term.

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Donate to Charity

Giving to charity will make a difference in your community and you can also claim a tax deduction if you itemize.

And our personal favorites...

Put it Toward a Down Payment

Saving for a down payment can be challenging. Start saving early by putting your tax refund toward a future down payment.

Pay Down Your Mortgage

Make an extra payment on your mortgage with your tax return to save money on your interest while also reducing the term of your loan. Be sure to inform your lender that your extra payment should be applied to principal and not interest.

Ready to start the homebuying journey? Contact AnnieMac Home Mortgage today to get started on your preapproval application!