Have big plans for your tax refund? Not so fast. These tips will help move your financial goals forward vs. blowing the bag!
As an entrepreneur closing out my first year of business with Saving Solutions, it’s imperative for me to find ways to reduce my taxable income. Like so many who practiced strict budgeting last year, it’s tempting to use a refund to treat myself. To avoid frivolous purchases and keep myself and others on track, I’ve compiled these practical tips to make this tax season work for you!
Don’t Overpay: Leave No Tax Credit Unturned
Know where you can save money on taxes to reduce taxable income. Learn more about tax-saving hacks business owners often miss.
Start/Boost an Emergency Fund
Leverage a portion of your tax refund to start an emergency fund or to bolster your current emergency savings. Remember: emergency funds, by definition, should not be easily accessible. Restrictions on my own emergency account prevent me from accessing funds for three days — an added measure of protection to help me truly define what constitutes an emergency.
Use Caution in Tapping Your Refund for Short-Term Needs
Life happens — and it’s inevitable some will need to tap into a tax refund to meet immediate needs. Perhaps you are a federal government employee playing catch-up following the recent shutdown or have been recently laid off and are struggling to stay afloat. If possible, only use a tax refund to lower or pay off debt or save for a major purchase. End-goal: to avoid the cycle of over reliance on credit.
Take action now to meet goals next year
Aspiring entrepreneurs can start preparing now to be successful next tax season. Create a line item in your budget's discretionary savings to earmark for business start-up funds. Be sure to save receipts during the the start-up phase. You can write these expenses off on your 2019 taxes after your first ‘income’ event.
The Saving Solutions R E.A.L I S.T.I.C Budget Method can help you maximize this year’s tax return funds and discretionary income to begin pursuing your short- and medium-term goals.
Our budgeting solutions save you time and money by using a simple 5-step approach that removes the guess work from your monthly budgeting process and creates hundreds of dollars in savings when combined with discipline and several budget hacks.