Tax Refunds

Tax Refunds

Most economists agree that the way to get the economy moving is to get money into the hands of those most likely to spend it. That’s why recent stimulus packages have included adjustments and tax credits meant to lower tax bills and, in some instances, boost tax refunds. It’s apparently working: The Internal Revenue Service has announced that it expects to issue between $250 billion and $300 billion in tax refunds this year.
Don’t neglect your retirement savings plan when doing your taxes, columnist Robert Powell advises. From required minimum distributions to the Savers Credit, he lists five essential things you need to remember about retirement savings and tax returns. Also this week, Jennifer Waters talks to financial advisers about what to do with your tax refund. While most give the standard advice about paying off debt and putting it into savings, one life coach actually recommends you consider taking a family vacation. So go ahead, spend that tax refund but wisely. Finally, as the countdown to the tax-filing deadline approaches, keep an eye on MarketWatch’s tax guide, where you’ll find our last-minute survival guide and all the news, tools and tips you’ll need.
For much of the economic downturn and recession that preceded this year’s tax season, taxpayers were repeated the same line when they asked what they should do with their tax return: Pay down debt, put it into an IRA or mutual fund, save. Contrary to the prevailing sentiment, however, not everybody spent the early 2000s popping Cristal, building McMansions and bedazzling their clamshell cell phones with diamonds while their jobs hung by a thread. Those who saved, lived within their means and held down jobs while their neighbors applied for every credit card that came with a free T-shirt while still collecting unemployment may feel entitled to use their refund on something borderline frivolous this year, and don’t need their self-righteous neighbors who recently found financial religion telling them what to do.
Sources: http://dailynewspulse.com

Tax Refunds