What Are You Gonna Do With Your Return?

Well, it’s that time again. Tax time. Many of us will be getting returns. Plenty more of us will unfortunately owe the US government even more of our money at the end of the year, depending on a variety of variables and how you choose to claim during the year.

For instance, those that claim a 0 usually will get some kind of refund because they are paying Uncle Sam more in taxes out of their paychecks throughout the year, and people who claim a “1″ usually end up owing because they chose to have Uncle Sam take less out of their pay during the year.

There are arguments for both ways being better, but ultimately you should consult a tax professional to make the decision based on your personal financial situation. I think that with the shift in thinking from consumerism and buying everything under the sun to more of a saving mentality, hopefully more people will do intelligent things with their tax returns this year instead of squandering it on perishable items.

It’s easy to do, especially if you’ve been scrimping on everything for a year or two because of your financial situation, you tend to go a little wild here and there when you get some extra cash. However, if you use some discipline, you can make that money work for you for the rest of the 2010 year.

After taking a small amount out for yourself to spend on something “fun”, you should either invest the rest, pay your taxes in an installment to the Fed so you can reduce next years taxes, or perhaps even consider making an extra payment on your mortgage with it. These are all good choices, but it depends on what your situation is as to which is the absolute best way for you to utilize this money.

I got a small refund from the IRS, however, since I pay quarterly installments to them, what I did was I just applied that refund to my firs quarterly payment, effectively eliminating that first payment. This way, I won’t have to scrounge up that money and turn right around and pay it out again and write the check etc.

Now, I’m able to budget my money better, and I have peace of mind knowing the first one is paid for the year. Not to mention, I wasn’t tempted to spend this money, which is probably the worst thing I could have done considering we have so many projects around the house we want to do that will cost money, and at least that is an investment.

It’s really up to you, but if your gut is telling you that you should be doing something more intelligent with your money as you’re spending it on hundreds of dollars of clothes or the like, well then, your gut is probably right.