How Would You Spend Your Tax Refund?

Shawn Morris By Shawn Morris, 8th May 2013 | Follow this author | RSS Feed | Short URL http://nut.bz/3sp-p0q5/
Posted in Wikinut>Money>Tax

Everybody loves getting a refund from the IRS. The biggest question will be how will you spend it?

It's Tax Refund Day.....Any Plans?

Picture this: You have your eye on a 60’ Sony Flat Screen television that your current finances will not let you purchase. In this case, individuals will take a shot at saving the money for the television, rob Peter to pay Paul and go ahead and purchase the television, or the choice that few think about, adjust their withholdings to ensure a tax refund. Yes, I know what you are thinking: give the IRS more money? Are you serious? Well, the bottom line has to do with your dependents. If you carry 0 throughout the whole year, you will indeed payout more in taxes; however, you will not even miss it (well, that may hold true for some). On the other hand, the more dependents you carry, the less they take out, but the shocker will come when you file and find out that you owe instead of getting a refund.

Carrying your children will earn you a credit. Also if you are a student you can also claim an educational credit. However, those who fall in a high tax bracket also face the huge risk of owing taxes because according to the IRS, you make too much money, regardless of your financial outlook. Okay, enough with the downers. Like me tell you how I earned my tax refund and how I spend it.

I have been in college since 2006, and every year I file a W2 from my school that details the price that I paid for school that previous year. I only claim myself, but I add an additional $10 to be withheld so that I can lock in a refund every year. The educational credit is an automatic which is usually ¼ of whatever you spend in tuition that year. I should be amped up about receiving a substantial refund; however, every time I plan ahead the expected happens. Now, what I do is I just call my refund day “Bill Makeup Day” because as hard as I try and some of you can agree, you tend to forget about one or two bills (okay quite a few) and then you get the dreaded call from the bill collectors. They do not care what went down or what happened to you; all they want to know is how you are going to pay what you owe.

When I find out what day I will receive my return, I pull out this huge file box with all my pass due bills from that year. Credit card payments and medical bills are the majority of them, so I sort them out from lowest to highest and in the corner of the envelope I put the amount that I will send on each depending on the amount of my tax return. My strategy is to pay it in full or at less more than half of what I owe, so that I can get the bill collector from ringing my phone to death. After I am done, if I have anything left over (which I normally do because I do like to spoil myself), I pick out one item that I want, but it has to be something that I can benefit from at the same time. What I hate the most is getting something that I only use one or twice and I only run across it again when I am cleaning out my closet or garage.

So there you have it. That is how I spend my tax return every year. Some may think it is a little unorthodox, but I call it one more step in becoming debt free. Oh, you like the sound of that? Give it try. You may surprise yourself at the end.

Tags

Business, Individual, Money, Refund

Meet the author

author avatar Shawn Morris
I am a father of two boys and I have been married for six years. My focus areas of writing are short stories, poetry, fiction, and nonfiction.

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author avatar Clarence Schreiber
8th May 2013 (#)

I would love to be debt free. But it seems like when I do something else comes up and I am back to square one. So this is why I am trying to writing articles for a living. I love writing but it comes with little pay. I hope that the rewards comes of my articles soon. Thanks for the information.

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