When tax season rolls around, do you get a refund? If you do, consider yourself lucky. Then consider that the money you are getting back is actually the money you paid in to the government during the year that they got to keep without paying you any interest. When was the last time that you checked your dependents and filing status with your employer? One reader who had 3 kids found out that they still had her husband marked as single on his W-4! By changing that status, they get a smaller refund but his paycheck increased substantially.
When your income tax return comes, what do you do with it? Before it even arrives, sit down and make a list of how you should use the money. Do you need to build your $1,000 emergency fund? Do you have a big appliance you need to purchase? What is the best financial decision you could make with this money?
And whatever you do, DO NOT pay out the wazoo to have your filed for you. I always recommend trying to do them yourself online before going to a place like H&R Block. I once knew someone who paid almost $600 for their taxes to be completed and then paid another $50 to have their check rapid refunded to them. That’s $650 which would pay for a new washing machine!