Tax Refund Came, Now What?

Unlike all those people scrambling to get their taxes done to meet the deadline 2 days ago I’m one of those people that seeks to extract what’s rightfully mine from the federal and state governments as soon as I possibly can.  Unfortunately I usually have to wait a while to file due to all the brokerage and banking accounts statements I need.  This year it was March before I finally got everything done and submitted for my refund.

I know I know.  This would all be much easier if I would just try and optimize my withholdings from my W-4.  I would do it, but my income is too variable so I worry about owing the government a big wad of cash.  I guess that’s better than giving them a 0% loan though.  Perhaps in my next job I’ll set it up that way.

Anyway, I got federal refund today.  About $1,700.  The smaller the refund, the happier I am because that means I’m getting closer to optimized.  For me $1,700 is a better number than I’ve gotten in the past.

Now, what do you think?  How should I spend it?

Let’s see how about that lovely chaise lounge DW has been eyeing?  Nah.

How about paying down some credit card debt?  You guys know I don’t have that!

How about an auto loan?  You know I don’t have that either although the .74% APR from PenFed is really tempting when you’re driving a 15 year old vehicle.

How about funding a Roth IRA?  Now that’s a plan I can get behind.  I transferred $917 over to my Roth IRA holding account.  I created the holding account so I can dump in $ throughout the year and then fully fund my Roth and DW’s Roth at the end of the year.  I wish I were working towards the 2014 Roth’s, but we’re not quite there yet.  Why $917?  Well, I can put in $5,500 per person which sums to $11,000 and when you divide that by 12 and round up, it’s $917.  So, I knocked out this month’s contribution to the Roth’s.

That leaves roughly $783.  That’s just about enough for a fishing canoe for me!  If only I had a place to store a 16 ft. canoe.  Ha!

Oh well, guess that remainder will just sit in reserve account for now…

What about you?  How will you direct your tax refund?

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