Skip to main content
Routing #321180379

3 Ideas for When the IRS Owes You 

Breaking even is the goal. But if you find yourself receiving a refund this year, consider these ideas for putting it to work.

When it comes to federal income taxes, a small refund or getting nothing back means you (and your tax preparer) were precise and came close to achieving the desired outcome: to break even. If you end up with an unexpectedly large bill or a refund, however, that means you may want to reconsider your estimated taxes or how much you’re withholding from your paycheck. A qualified tax preparer can help you find tax strategies that could help you keep more of your money in your pocket – legally.

If you expect a refund because the government withheld too much of your money, don’t think of it as a windfall. We’re not denying the psychological effect of getting a springtime “bonus,” we’re just encouraging you to make sure your money is being used wisely. Consider investing in your life, well-being and financial future. Then remember to talk to your tax pro about making adjustments for next year.

If you do end up with a refund this year, consider these ideas for making the most of it.

Invest in your future

  • Save for retirement. Contribute to your existing IRA or start a new one.
  • Pay down debt. Eliminate high-interest debt as soon as possible.
  • Build up your emergency fund.
  • Fortify your portfolio. Talk to your financial advisor about how to invest the money.

Invest in yourself

  • Save for higher education. For yourself, your kids or grandkids.
  • Renovate your home. Add value to your home by making thoughtful upgrades or repairs.
  • Start an exercise routine. This could mean purchasing at-home equipment, connecting with a trainer or joining a gym. Your well-being is important.
  • Start a “fun” fund. Save money for future big-ticket wants so you can enjoy them without going into debt.

Invest in the world

  • Become more generous. Give to a charity you have always wanted to support.
  • Go green. Invest in ways to save on energy expenses and reduce your carbon footprint.
  • Grow your own garden. Save money by growing healthy fruits and veggies in your backyard.

Whatever you decide to do with your refund this year, avoid squandering the money and make the most of it. If you end up owing taxes, talk to your tax and financial advisors about ways you can pay the bill without disrupting your investment plan or depleting your savings. If you anticipate owing taxes again, you may also want to discuss investment and tax-saving strategies to reduce your liability next year and over the long term. These two professionals should be able to work together to address your specific situation and help you refine your tax strategies going forward.

Raymond James Corporate
Privacy Notice │ BrokerCheck®

Suggested Articles

Image for The Benefits of Investing with Intention The Benefits of Investing with Intention

Align your values with specialized investment and philanthropic vehicles.

September 27, 2022
Investments
Estate & Giving
Image for The Vital Role of Self Advocacy in Healthcare The Vital Role of Self-Advocacy in Healthcare

Get off the sidelines when it comes to protecting your greatest asset: your health.

September 20, 2022
Investments
Family & Lifestyle
Image for When Should You Ignore Conventional Retirement Advice When Should You Ignore Conventional Retirement Advice?
In certain cases, taking a less traditional route may be a better financial fit.
September 13, 2022
Retirement and Longevity
Investments

Financial Advisors offer securities through Raymond James Financial Services, Inc. Member FINRA/SIPC and securities are not insured by credit union insurance, the NCUA or any other government agency, are not deposits or obligations of the credit union, are not guaranteed by the credit union, and are subject to risks, including the possible loss of principal. First Tech Federal Credit Union and Addison Avenue Investment Services are not registered broker/dealers and are independent of Raymond James Financial Services. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.

Raymond James Financial Advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered. Therefore, a response to a request for information may be delayed. Please note that not all of the investments and services mentioned are available in every state. Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. Contact your local Raymond James office for information and availability.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

Neither Raymond James Financial Services nor any Raymond James Financial Advisor renders advice on tax issues, these matters should be discussed with the appropriate professional.