Budgeting Tax Refunds
It’s that time of the year and people are filing their taxes in hopes of getting a refund or at least not owing. With the different changes in the tax laws and possible government shutdowns, people are paying close attention to their taxes this year. A lot of us even made sure we filed early so that we could get our money in a timely fashion just IN CASE the government shuts down again.
So, if you’re trying to get your budgeting on…what do you do with your tax refund. Or even yet, what do you do if you owe.
If you’re getting a refund, even if you plan to treat yourself…BUDGET IT. Treat it as if it’s another pay check coming in and allocate money to where it needs to go. My refund is going into three categories: Business, Sinking Fund, Debt. I’ve allocated appropriate amounts to those 3 categories. If the money is just sitting there without a role and a purpose, it’s easy to blow it or even for it to “mix” with your regular money and end up causing you to get off of your regular budget.
If you happen to owe, there are a couple of things you can do. You can contact the IRS for a payment plan to pay it off before there’s any interest hopefully. Also, look to see if you can change anything about your current deductions so you won’t owe next year. And even if you expect to owe again next year, take the amount you expect to owe and create a sinking fund for it so the money is already set aside next year.