Did you know you have options in how you receive your tax refund? The IRS has made it easier for you to save by offering you the option of receiving your tax refund in the form of savings bonds, payments to retirement accounts, mutual funds or your typical cash directly deposited to your bank account. They are even testing out debit card options for those that don't have bank accounts. Liberty also
As of March 4th, the IRS had issued more that 52 million refunds worth $161 billion for an average refund of $3,070. Can you imagine having use of $161 billion for one year without having to pay interest?
If you had the $161 billion invested in a basic savings account paying minimal interest rates, it would return more than some countries GDP! OK that maybe a stretch, but it certainly is a large amount of money.
If you are having difficulty making your monthly bills, check your allowances so you are not giving the IRS too much money interest free. It is silly to pay the credit card companies interest while Uncle Sam has your money and isn’t paying you interest.
Depending on your financial situation, receiving the funds via mutual funds may be a great idea. If you are carrying credit card debt then I would focus on knocking that out prior to investing. Mutual funds are a great way to diversify your investments and build wealth for the future.
This year, taxpayers can designate anyone to receive a savings bond and also designate a co-owner and beneficiary. This is a great option for grandmas and grandpas looking to fund college tuition for their grandchildren.
Ask your local income tax professional at Liberty Tax Service to help you decide which refund options are best for you!
Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.