Ask the Readers: How Have You Spent Past Tax Refunds?
Editor's Note: Congratulations to Gina, Mary, and Julie for winning this week's contest!
It's tax season! Many Americans dread the paperwork involved in filing taxes, but no one would turn down a tax refund if it turns out the government owes you money. Putting the tax refund into a savings or retirement account is the sensible thing to do, but depending on your financial situation and your goals at any given year, you may have decided to spend the money elsewhere.
How have you spent past tax refunds? Do you think the money was well-spent, in retrospect? Are you expecting a refund this year?
Tell us how you've spent your tax refund in past years and we'll enter you in a drawing to win a $20 Amazon Gift Card!
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I never get a refund - always owe.
I've spent past tax refunds on vacations and home improvements.
I usually save it. I'm not expecting a refund this year though, now that I'm married I usually end up paying more.
I usually use 2/3 of it to pay off debt and the rest to buy something I've been wanting.
I spend tax refunds on bills. I try not to get tax refunds and to adjust my withholding.
I usually allocate half of my refund toward building my emergency savings, but then use the other toward travel. It's a nice way to treat myself!
My refund goes right into savings. Every year.
I am expecting a small tax refund this year. I plan to out it in savings, as I've done for the several past years. I have no regrets about that, I spend the money when it is truly needed!
I generally save my tax return and use it throughout the year to cover extra expenses as they come up, for example, replacing a water heater or covering an unexpected vet bill or car repair. At the end of the year I use part of what's left for Christmas gifts. This has worked well for me throughout the years.
It's rare that I get a refund! But, when I have in years past, I've usually used it to pay off bills.
Since we're self-employed and pay quarterly taxes, if we've overpaid, we pay ahead on the coming quarterlies. In the rare event of an actual refund, we use the money for regular expenses.
I don't get a large refund so I usually just put it most of it in savings but use a little for a treat. Like if it's $560, I'll put $500 in savings and use the other $60 to go out to dinner and the movies.
We never get a refund.
I usually spend it on bills.
I've either saved a tax refund for future needs or paid off student loans. Considering I don't have student loan debt anymore, I think this was a good choice.
When I was still paying off my student loans are usually used it for that. Now that they are paid off I just put it away as savings.
I try not to get a refund. That's my money the government has kept without giving me interest. If I owe, that's me using their money as a loan without paying them interest.
Took my wife to Greece to celebrate 40 years of love...Larry S. In Ct.
If I get one, I just save it.
I don't rely on my tax refunds for purchases or to pay bills. Ideally, the tax due or refunded come April 15, should be within $100 but that is difficult to do. Last year, I applied my refund from 2015 to my taxes for 2016 and will probably do the same this year since I pay estimated taxes.
I haven't gotten a refund in years.
When we had debt, it would go toward that. Now it goes in the college fund.
Last year I bought clothes! This year I'm putting it towards the travel to various friends' weddings.
lol I never have a refund to spend!
On Lotto Tickets and Rum!
We try not to get a refund - pay ourselves instead of Uncle Sam. If by chance we do get a refund, the money goes into savings. We budget for fun and entertainment so refunds are just another way to reach our goal of early retirement.
This is year I used part of my refund to fund my 2016 IRA, and the rest to pay bills.
I pay quarterly so my refunds are usually quite small or sometime I owe. If I do get money back, I put it in savings.
I am going to use my tax refund to build back up my savings after paying off my mortgage!
My husband and I have learned that any refund is divided in half. The first half goes to pay down immediate expenses and debt. The second half is applied to our every-other year vacation fund. We pay our vacation in full before going (transportation costs, any tickets, meal plans, etc.) Then anything left in the vacation fund is applied to debt.
We added our tax refund money to our Capital One Investing account. The funds are already invested. We also plan on transferring the assets in this account to Fidelity, in order to achieve a 50k miles points bonus from American Airlines.
Paying down debt when we had it. Haven't gotten a refund it several years.
We usually have a nice dinner or pay a small bill. We don't usually get very much back.
We usually put it in savings or use it to pay bills.
I think we got a refund once and it was added to our mortgage payment.
Any refund goes toward paying off current bills or saving for birthday/holiday gifts.
I received a rather large refund in 2009 due to the first time homeowners tax credit. I used most of it to pay off my car, which was three years old at the time, some in savings - can't remember what I spent the rest on. Unfortunately I no longer own that home, but I still have that car!
I usually put my refund into savings.
I have always just put my tax refund into my bank account and spent it without a second thought, but last year I put it into a high yield online savings account for the first time. I've been watching the interest compound over the past year and I'll be using it to help pay for my certification exam when I graduate from Physical Therapy school this May! I'll be doing the same this year as well.
I rarely get a refund, but when I do it's usually small. So maybe we'll go out to dinner.
What's a refund?
I'm glad to see, though, that at least SOME people are getting them!
We have it so we're even with no or very little tax refund. That way the government doesn't get to keep my money for a year interest free.
We often spend any refund we receive on a home improvement. This year, if we get a refund, it will go toward painting the exterior of our house.
I have always used it to pay bills
I usually save a portion and then use the rest towards home improvements or something special for myself. I have been trying to be better about adjusting my withholding though because ideally I wouldn't have a refund at all! No reason to give Uncle Sam an interest-free loan!
We've spent our refunds lately (the years that we got one) on never ending construction expenses for our home addition.
In the past when I paid taxes I always used it to pay bills or debt.
Anything that I get, I put into savings.