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Invest Your Tax Refund in Your Home

Monday, March 23, 2020
by Scott Darling


A recent survey by Credit Karma shows that “46% of respondents expect to get refunds of more than $1,000 in 2020 (for their 2019 taxes)...” Now, we won’t get into the financial sense of tax refunds, but if you are one of that 46%, and you’re planning on doing some homework with your refund, here are a few suggestions on how best to spend that money! 

 

$1,000 or Less 

  • Add or improve your front walkway.  Whether you plan on putting your home on the market soon or not, a new walkway will improve the curb appeal.  

  • Replacing the front door is an expensive job, but you can create a whole new look for the front exterior of your home just by having a new front entranceway. 

  • Install new light fixtures, especially if you’re tired of the builders-grade fixtures. If you shop smart, you can get stylish new flush-mount lights for every room. 

  • Do a minor bathroom renovation:  replace the toilet, faucets, and lights, and give the tub/shower a makeover with a refinishing kit. 

  • Paint the kitchen cabinets, replace the hardware, and add a tile backsplash. You won’t believe what a difference those three minor renos will make! 

  • Upgrade one appliance - kitchen appliance.  

 

$1,000-$2,000 

  • Any repairs that you’ve put off because of cost should be done before any improvements to renovating is done. Protecting your investment is more important than new bathroom tile. 

  • If your front lawn is a black canvas, hire a landscape designer to create some improvements.  

  • Have your “popcorn” ceilings removed by a pro and add new crown molding.  

  • Tankless water heaters, whether you choose whole-house or single-point, are worth the investment as you’ll see a difference in your electric bills. 

  • If you’re handy, you can take on a DIY job and save money: paint your home’s exterior, install new flooring, add wainscoting, or install kitchen countertops. 
     

As much as you’d like to see something physical after spending your tax refund, paying any accumulated debt down or investing it will pay you back in the long run. Check out these ideas from Investopedia,  and take off some of that financial load you may be bearing! 

 

Courtesy of Chester County PA Realtor Scott Darling.

 

Photo credit: the money pit 

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3 Smart Ways To Use Your Tax Refund

Thursday, May 12, 2016
by Scott Darling

tax refund

The average tax refund in 2015 was approximately $2,800 according to the IRS, and similar refunds are expected in 2016. For those getting a refund, there are many options to consider in deciding what to do with this unexpected income. The big question is what is the smartest option?

While you may want to splurge with your refund, careful management for the majority of the funds is a smart financial move. A tax refund or any unexpected income can be used to help reach your financial goals without impacting your current standard of living.

Massachusetts Mutual Life Insurance Company (MassMutual) suggests three things to consider for this year's tax refund:

1. Pay down debt. Take a look at your current debt. Find out which have the highest interest rates and consider paying those down first to help prevent interest from continuing to add up. Another common strategy is to pay off your smallest debt first, then work your way up to the larger ones.

2. Build an emergency fund. Consider using at least a portion of your tax refund to give your emergency fund a boost. Make a goal to stash away three to six months' worth of expenses in cash in an emergency fund you can easily access if you need to, such as a savings account, and use your refund to work toward that goal.

3. Pay the future forward. The positive news is that Americans are living longer. The challenge is that their health may change with aging, and people are now faced with saving for a retirement period of up to 30 years. So if you haven't started to save or want to boost your retirement savings, consider putting your refund in a retirement savings plan. You may also consider taking a portion of your refund for higher education - whether for yourself, a child or grandchild. Or, if you haven't considered life insurance or disability income insurance yet or need to revisit your plans, now's a good time to talk to a financial professional.

A tax refund is money you've worked hard for, and it is OK to do something fun with it. Just make sure you consider committing at least a portion toward your short-term and long-term financial needs and goals. (BPT)

Information courtesy of Chester County PA Realtor Scott Darling.

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5 Tips To Protect Your Identity and Celebrate Refund Season

Wednesday, March 9, 2016
by Scott Darling

tax refund

Tax refund season is here and there's a lot to celebrate. This tax season, while consumers are eagerly awaiting their refund, tax preparation companies, tax officials and the IRS are working together to combat one of the fastest growing threats for tax season 2016 - tax identity fraud.

Based on IRS data, nearly 3 million people have been victims of tax identity theft since 2010. Every year, criminals use increasingly advanced tactics - particularly geared toward taxpayers filing online - to steal taxpayers' personal information, file fraudulent tax returns in their names and steal their refunds. After fraud occurs, it can take months and multiple steps by the victim to access a stolen refund and regain an identity with the IRS.

Protect your identity - and your refund - with these five tax tips from H&R Block:

 1. File early and be cautious. Filing your taxes early will allow you to claim your refund before a criminal can. Before you file, protect your personal information by installing a security software with anti-virus and firewall protections.

 2. Keep your paper records safe. Shred records you are no longer using and keep your social security card and any sensitive documents under lock and key.

 3. Do not respond to individuals posing as a tax agency. The IRS does not demand immediate payment without sending a bill in the mail first. If you receive a phone call or an email with an external link, do not click on the link or share personal or financial information unless you personally know the person on the other end.

4. Change your password. The 2015 tax season saw a significant increase of tax fraud in the do-it-yourself (DIY) space. When using at-home tax software create a strong password with capitalization, numbers, and symbols or avoid the risk by visiting a tax preparer.

 5. Use tax identity protection services. Visit the IRS website to learn more about how to protect your identity.

This tax season, take away the stress and put the "fun" back in "refund" by filing early. (BPT)

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