Yesterday, Sunday, a day of rest, was a day of relief because I got all of my taxes done: federal, state, and local, and my total tax obligation was far less than I expected. Am I getting a refund? No, I am a three-year old business, and I cheered that my net gain was 70 times the 2014 gain…one step at a time. It is a good feeling; but no refund here!
My total tax liability still due after all was said and done was really low! Maybe a refund next year.
Interestingly enough, in The Plain Dealer in Cleveland was an article by Michael Mcdonald of the Tribune News Service, published the results of a recent consumer survey by GOBankingRates found that 30% of women and 25% of men plan to use their tax refund to pay off debt.
An equal amount of men and women planned to put their tax refund into savings. However, different age groups including seniors and Millennials (25 to 34) planned heavily on putting the dollars into savings.
But many folks did plan on spending their refunds on vacations. This was the third most popular way to use this “windfall”.
The last two most popular areas where tax refunds were going to go according to this survey were major purchases or a splurge. Interestingly enough, the “splurge” planners were more often in the lower income brackets…
Yes, I have a bias…plan your taxes so that you do not owe and you do not get a refund. Why? Because it is always better for you to have the use of your dollars if you are a business owner or even if you are not. The government pays you no return on your refund. Save whatever you can…but don’t count on the government to be your banker for a year. It is all about planning not only for your income but also for your taxes.
Before you decide where to put your refund, ask yourself: “HOW MUCH DO I HAVE IN AN EMERGENCY FUND?” Then make your plans.