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When I spoke to Bob Meighan, TurboTax’s Vice President and CPA, in November we spoke about how couples can optimize their tax filings.
One interesting point Bob shared was that the average refund last year was around $2,700. For many families, that's a big enough amount that they can make some progress on their family's financial goals.
Checking Your Tax Refund Status
Though most of the time your tax rebate comes according to schedule, if you haven’t received your tax return when you expected, just go to the IRS’ site and enter your information.
If you prefer to speak to someone on the phone, the number is 1-(800) 829-1040.
If you have a smart phone, there's actually an app called IRS2Go to help you check the status of your tax rebate. the great news is that the app is free. The app also allows you to sign up to receive tax tips from the IRS to your inbox.
Put Your Tax Refund to Good Use
No matter how big or small your refund is there are several ways you can use it to put your family's finances to good use.
- Start or build your emergency fund. Based the amount on your family’s personal savings needs. Even if it’s a starter emergency fund, it’s a cushion for you in case something happens like a car breaking down. For your emergency funds please keep it in a high interest savings account where it’s possible to access it in emergencies without being tempted to spend it.
- Pay down your debt. If you have an emergency fund ready to go, then look at putting your tax refund towards paying down your debt. Paying down your debt can improve yourmonthly cash flow.
- Open or contribute to your IRA. If you have $1,000 or less you can open an IRA. The advantage of starting now rather than later is the benefit of compound interest.
- Donate to a worthy cause.
Planning Your Taxes
Every year sitting down and looking at your current withholding status for just 10 minutes can be extremely helpful.
Tax Rebates and You
If you're looking for more on tax rebates, check out my post on TurboTax's blog. I’m a contributing blogger there along with some other personal finance writers and Intuit's team of savvy tax experts.
If you got a tax rebate last year, how did you use it? What are plans for this year?
Photo Credit: 401K