How to Get Max Return Out of Your Taxes
Did you get a holiday bonus from your employer? Or maybe you have a tax refund coming. If so, do you have any of it left, have you already got it spent in your mind, or are you thoughtfully considering how you can best utilize this surprise resource? Annual bonus payments and tax refunds are nice windfalls, which can be used to create more stability in your life. While it is fun to treat such income as “mad money” to be spent on frivolous endeavors, it may be more effective to use it to create more for your long run.
The Best Uses
Paying down a home mortgage is one of the best uses of extra cash. The less principal on which interest is calculated, the more money you will keep for yourself in the long run. Another benefit to making a principal payment is that if it brings the remaining principal to less than 80% of the appraised value of your home, then private mortgage insurance can be dropped, saving you even more money.
Contributing to a retirement account is another excellent use of extra money, especially if your employer matches your contribution.
If not, consider the possibility of investing your bonus or tax refund into starting your own side business. Here’s a great article about the “side hustle” and how it could help you.
Home improvement needs are common for most homeowners. Keeping up the condition and value of your home are important long-term goals. Letting things go too long typically increases the ultimate cost of repairs. Dealing with them early can pay dividends.
Another good use of bonus funds is to invest in an estate plan if you don’t have one already. Over 50% of Americans between ages 55 and 64 don’t have a will. And 69% of parents have never named legal guardians for their kids. Of the 31% who have, most have made one of 6 common mistakes that means their kids are at risk. Are you part of this group?
Dying without a will, let alone a comprehensive estate plan and Kids Protection Plan for your kids creates complications for your heirs and can leave your family in Court and/or conflict. While you may not relish the idea of investing your bonus or tax refund in an estate plan, the cost to you now would be much less than the cost to your loved one’s later.
If you would love to use your tax refund or holiday bonus to do the right thing by your family, contact us and ask for the tax refund/holiday bonus special that includes a Family Wealth Planning Session + analysis of the best use of the funds for your current situation.
Let Us Protect You
At Bridge Law Law Firm, we believe in developing trusting relationships with families for life. That’s why we offer a Family Wealth Planning Session, where we can help identify the best financial strategies for you and your family. You can begin by calling our office today to schedule a time for us to sit down and talk because this planning is so important.