Friday, January 30, 2009

What to do with an $8000 tax refund?

I filed my taxes last night. It was very simple and I used H&R Block Tax Cut Premium. I usually use the regular edition but since I bought the house this year I figured maybe its time to upgrade.

According to the Taxcut I saved $1500.00 by deducting my mortgage interest, student loans, and contributing to a tax deferred retirement plan.

But the even better news is that with the first time homebuyers credit my refund will be $8239.00.

What I am going to do is put that money right into my emergency fund, although I may take $1000.00 and apply it to my car loan. I want my car paid off by the summer- its my #1 goal for 2009!

I also need to buy a plane ticket to Panama, but at only $356.00 round trip, I could actually pay for it out of my paycheck.

What would you do with an $8000 refund?

until next time, think prosperous thoughts



Sheena said...

Hi there,

I would save it too! This economy is not the best and it's always good to have some funds saved if you can. We did ours last night, as we too closed on our home yesterday and our refund is close to yours.

Fabulous Financials said...

Using it to beef up your efund is a great idea! I'd put it in a high yield savings account or lock it up in CD ladders.

Keep in mind, the first time homebuyer's tax credit is a loan. It must be repaid to the govt over 15 years, beginning the 2nd tax year after the credit is claimed, or when you sell if sooner. Pending the passage of a bill in Congress, homebuyers who purchased after 1/1/09 may not have to repay.

Small Budget, Big Style Chick said...

I would definitely save most of it and put some toward your debt. It never hurts to have that extra cash reserve especially because you are a homeowner and may need to do home repairs down the line.