Hello, friends! Happy tax season! I think I am one of the few crazy people who are excited to file their taxes. First of all, I’ve never had to pay in, so that probably helps fuel my fire – I have a feeling I wouldn’t be quite so eager about tax time if I knew I was going to owe money. I also file my own taxes through TurboTax and love how easy it is to follow along and accomplish everything for a fraction of what it would cost to go through an accountant or brick-and-mortar tax preparation company like H&R Block (this isn’t a sponsored post, I just truly love the service).
I always file my taxes as soon as I’ve received all of my tax documents. Of course it’s great to receive my refund quickly, but I also like to check it off my to-do list because it’s one less thing to take up space in my brain (which feels like pretty prime real estate as of late :)). I look forward to receiving my refund and deciding how best to spend it. Yes, I realize that this is essentially money the government kept from me interest-free over the past several months, but I’m choosing to view it in a more optimistic light and think of it as an unexpected windfall.
My refund was good but not what I had expected and definitely not nearly as lucrative as it was for my 2017 taxes. I heard on the news that this has been a common theme for early filers thus far in 2019, with an average return of about $1,500. Last year, I received over $4,000 back from the federal government, which was completely unexpected and a huge sigh of relief. It went a long way in helping me pay off my student loans early. I was a first time homebuyer, I paid tuition and purchased textbooks, and I paid interest on my student loans.
This year, I will be getting back $2,512. I expect my return was less due to some reported self-employment income (my nannying job) and no tuition expenses to write off. I made my last tuition payment to the school in December 2017, even though I was still enrolled in the spring semester of 2017 and graduated in May 2018. For the final year, I was able to write off the interest I paid on my student loans. It’s fantastic that those are now paid off in full, but the downside is that I won’t be able to use that as a tax credit any longer! Oh well – I’m definitely happier to be free from student loan debt. 🙂 For the life of my mortgage, I will also be able to deduct 40% of my mortgage interest thanks to a mortgage credit certificate I received when I purchased my home.
I owe just shy of $7,000 on my vehicle. My first instinct was to put all of my refund towards my vehicle; however, I have been extremely diligent with debt payoff and bettering my financial situation over the past two years, and I’ve decided I would like to allocate the money a little differently. I should note – the interest rate on my vehicle is super low (around 1.5%). If it was a high interest loan, I would definitely be funneling all of my money towards eliminating that debt. I am still looking forward to having it paid off since that’s an extra $400+ per month I can spend on other things. My friends and I are planning an international trip this fall, so I want to pad my travel fund a little more so I can afford nicer accommodations and a better flight plan. I’m all about budget travel, but in some areas I may want to splurge so it’s important to me to have enough saved up if I choose to go that route. I’m also hoarding my travel reward points for the same reason. Here’s my refund allocation plan:
- To Auto Loan: $1,712
- To Travel Fund: $800
I should receive my refund in the next week or two, and I will be that much closer to being debt free!
Have you filed your taxes yet? How do you plan to spend your refund?
Talk to you next week!