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What to Do With Tax Refund – Smart Ways

Many people are foreseeing larger refunds and are also convinced that they will receive deductions and credits they are entitled to. What can you do with your refunds? Here’s our list.
tax-refunds-2022
What to Do With Tax Refund – Smart Ways
Tax Day is almost here. Have you filed your taxes yet? Filing your tax refunds is key to your financial planning. When it finally drops, there's so much you can do with it.
In this article

Last year, when the Covid-19 pandemic ran rampant in the country, tax refunds were a much-needed relief to many Americans. But has been different so far. We hope that this year will give us the breathing space to plan to make the most of tax refunds.

Recent surveys show that many people have already begun planning what to do with their tax refunds. Many people are foreseeing larger refunds and are also convinced that they will receive deductions and credits they are entitled to. What can you do with your refunds?

Pay down debt 

You can consider setting aside tax refunds to pay down debt. Surveys show that young people are more likely to use refunds to pay their debts and get closer to their financial goals.

But this is a recent development. Experts believe that the Covid-19 pandemic stunned the country and has made us wake up from a complacent mindset regarding finances.

Save

If you don’t have any debt, you can consider saving the refund in a high-yield saving account and expect some returns. Suppose you don’t need the money any time now and have enough savings to cover an emergency expense. In that case, you can consider certificates of deposit (CDs).

Invest 

Build wealth for the future by utilizing tax refunds to diversify your investment portfolio. Most youngsters know the importance of investing but fail to diversify and restrain unwise spending that leads to long-term debt.

Pay bills

This could be an opportunity to pay off any outstanding bills you might have.

Treat yourself

If you’re usually on a limited budget, you can make most of the tax refunds to enjoy. You can use this surplus amount of money to indulge in an extra meal or a visit to the amusement park or travel. 

Donate 

It’s been a challenging year for many of us because of the covid-19 pandemic. Keeping that in mind, some people donate the refunds to charity or issues they deeply care about. You can transfer part of the funds to people who had a big blow during this season.

Plan to use the refunds

Instead of using your refunds to cover regular day-to-day expenses, consider using them to reach your long-term financial goals. Spend wisely. Save wisely. Invest wisely. Read more on how to refresh your finances this Spring.

If you haven’t filed your taxes yet, file with Beem. File all forms and all filing statuses with $10,000 IRS penalty protection. Check out Beem Tax Calculator to get a quick and accurate estimate of your federal and state tax refund.

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Richard Samuel

Richard Samuel

E Richard Samuel loves learning. From finding out the newest food in town to traveling and writing, he loves learning about everything. When he’s not writing, he’s probably trying to master the piano or watching food reviews.

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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