If you’re among the smart fellas who always pay their taxes on time to get tax refunds on time, you need to read this post carefully because your responsibility doesn’t just end here. You may have hired the best CPA firm in the US to file your tax returns, but now it’s your responsibility to properly utilize the tax refund amount for better returns in the future.
If you’re expecting a generous tax return from the IRS, don’t start making plans of spending the hard-earned money on reckless shopping. Tax consultants at Nidhi Jain CPA want you to know that tax refunds are crucial for your company’s brighter future. Here are a few things you can do to ensure you don’t spend your tax returns on anything unnecessary.
Buy Financial Freedom
There’s nothing more straining for your bottom line than lugging around high-interest debts with interests compounding month after month. If you’ve got outstanding high-interest debts, start crafting the debt payoff plan.
Whether it’s a mortgage or a credit card debt, paying it off with the tax refund is the best investment you can make, as it can save you hefty interest in the long run if you were planning on making the minimum monthly payments.
Even if the refund amount doesn’t cover the entire outstanding balance, try rolling over the remaining debt to a balance transfer with a lower interest rate. A lower-interest debt consolidation loan is a much more feasible option for those with less-than-optimal credit scores.
Create an Emergency Fund
While opportunity knocks at the door just once, emergencies don’t knock at all before wreaking havoc in people’s personal and professional lives. Having spare cash is key to handling emergencies efficiently. Creating a small emergency fund with tax refund money will help deal with various personal and professional emergencies without the added stress.
Buy Risk Insurance
If you plan to fight the company’s insecurities with the tax refund money, buying a risk investment to insure the precious assets is an excellent idea. For instance, companies operating in an earth-quale or flood-prone area should secure their premises against natural calamities so that they never have to worry about the damages. A small yearly contribution can help secure the company from a range of risks for a lifetime.
If you’ve been holding off on purchasing work-related items like tools, computers, and work equipment, using the tax refund money as an investment could be an excellent option, leading to a better deduction on next year’s return, too. However, since heavily priced equipment needs to be depreciated over the item’s useful life, buying them at the end of the fiscal year will mean the tax return benefit would be relatively smaller. Reach out to tax planning consultants at Nidhi Jain CPA to learn more about the best time to make the investments to streamline better tax returns and save more while spending more on the right items at the right time.
If you’re looking for more efficient ways to utilize your tax refund money or have questions regarding personal or business tax filing in Bay Area, CTC-certified tax accountants at Nidhi Jain CPA are your best bet. We offer comprehensive tax resolution services, along with comprehensive bay area bookkeeping and accounting services to clients in the Bay Area, Sans Francisco, USA.
Call us or email us now to learn how spending your tax refund wisely can help claim a better rebate the next time.