For some, thoughts of flipping the calendar to a new year also brings the anticipation (or dread) of filing your taxes. Soon the W-2s will appear in the mail. You’ll compile all the necessary paperwork. Once everything is together, you wait for the news. Do I owe? Or, am I getting a refund?
In 2017, the average taxpayer who received a refund got $2,763, an increase of roughly 2% over last year. If you receive a refund this year, will you splurge, or will you make your refund work for you? Consider any of these options.
Establish (or add to) your savings
Do you have adequate and accessible savings in case of an emergency? Unemployment, auto repairs, medical emergencies or other unforeseen circumstances can disrupt your life and your finances. Our emergency savings calculator helps you determine how much emergency savings you may need. Starting, or adding to, your liquid savings can help ease financial worries should an emergency arise so you can focus on your family’s needs.
Pay down debt
Are you carrying high interest debt? If so, it may make sense to use your refund to pay off debt instead of earning interest at a much lower rate. If you’re having problems making ends meet, Vantage Credit Union is here to help. We’ve teamed up with Accel Financial Counseling to offer members free money management advice.
Contribute to a retirement account
Have you been saving for retirement? Whether you are just starting out or you’ve been funding a retirement account for years, adding your tax refund to a retirement account can help you prepare for your future. The retirement specialists at Vantage Investment Services Group * can provide some suggestions on your savings plan. And don’t forget, you have until April 17, 2018 to contribute to your 2017 IRA to take advantage of potential tax savings!
Add to your home’s value
If you own your own home, consider tackling your home improvement list. Investing your refund in your home may not only increase your personal enjoyment, but also add to your home’s value.
Review your insurance coverage
Life insurance. Everyone needs it. But how much coverage do you need? Taking a portion of your tax refund to purchase a life insurance policy could make it possible for your family to sustain their lifestyle should anything happen to you. When was the last time you evaluated your insurance needs? Through Credit Union Insurance Agency (CUIA), ** members have access to simplified issue life insurance products, as well as auto, homeowners, umbrella and other coverage options.
Getting a bigger than expected return? Sounds good, right? What you may not know is that it may not be the most effective use of your cash flow. A large refund means you’ve loaned the government money from your paychecks throughout the year, interest free. The IRS has a calculator to help you determine the correct withholding amount.
Don’t forget, you have until April 17, 2018 to file! Vantage Credit Union members can get up to $15 off TurboTax federal products.
** The Credit Union Insurance Agency, LLC is a wholly owned subsidiary of Members Resource LLC, a Credit Union Service Organization.