Using My Tax Return

Tax Return: Not a phrase you would expect to hear this time of year. Of course, due to COVID-19, the tax deadline for 2020 was extended from April 15 to July 15. So as of yesterday, everyone should have there “i”s dotted and their taxes filed. If you’re expecting to receive a tax return soon and are interested in the best ways to use it, here a few initiatives we think are worthwhile:

Whether you have credit card debt, student loans, auto loan debt, or anything in between, using your tax return to pay down debt may be the smartest move for you. Compare the interest rates on your loans and credit cards, as well as considering any forbearance or suspended interest accrual, to determine where to apply your tax return for the maximum benefit.

If you find your debt is manageable and you would benefit more from saving or investing, consider putting your tax return into an emergency fund, a retirement savings account such as an Individual Retirement Account (IRA), or in investments such as stocks, bonds, mutual funds and similar options.

If you are comfortable with your debt or lack thereof and feel you have sufficient savings and/or investments, you may want to use your tax return for purchases that will save you money in the long run. These kinds of purchases would be items such as energy-efficient appliances, solar panels, electric vehicles, or xeriscaping. Take a look at where your money is going – water, electricity, gas etc. – and determine which area you could reduce your costs the most.

Visit our Energy Efficient Resource Center to learn more about solar and energy-efficient options.

Using your tax return to take out a Share-Secured Loan may be to your benefit. Doing so can help boost or build your credit score. It also allows you to keep your money in a savings account or certificate, so you can earn dividends on the funds rather than cashing it in for a purchase.

If you are interested in a Shared-Secured Loan, speak to a Wheelhouse representative today.

Although these are “our” top picks for how to spend your tax return, you may find more benefit through another avenue. You could also split your refund using multiple strategies and benefit in a variety of ways. In the end, you want to be sure to analyze your finances and determine how you can the most out of your tax return, based on your personal circumstances.