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?
